Question
The current spot rate is TRL 2.8/USD and the forward rate quoted by your regular bank is TRL 2.94/USD. This bank also offers 270 day
The current spot rate is TRL 2.8/USD and the forward rate quoted by your regular bank is TRL 2.94/USD. This bank also offers 270 day deposits and loans with an interest rate of 9% p.a. for TRL deposits/loans and 1% p.a. for USD deposits/loans. Yield is TRL 40 million in 270 days
Q1) Calculate Money Market Hedge
Q2) Forward market hedge.
Which one is superior from the above 2 hedge.
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
7th Edition
1259919714, 978-1259919718
