Question
The company hedges using a forward contract 1815 Gallons * BRL 90.15 = 163,622 Exchange Rate = 0.4227 Convert to USD = $69,163.02 Interest Rate
The company hedges using a forward contract
1815 Gallons * BRL 90.15 = 163,622
Exchange Rate = 0.4227
Convert to USD = $69,163.02
Interest Rate of USD = 0.0215
Present Value in USD = $67,707.31
The company using the money market.
1815 Gallons * BRL 90.15 = 163,622
Interest Rate of BRL = 0.065
BRL to borrow = 153,635.68
Exchange Rate = 0.4368
Covert to USD = $67,108.07
Present Value in USD = $67,108.07
Are the money markets and forward markets in parity? (Show the work)
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Fundamentals Of IT Audit For Operational Auditors
Authors: Timothy McWilliams
1st Edition
1634541332, 978-1634541336
