Question
The forward rate of th swiss franc is $0.50. The spot rate of the swiss franc is $0.48. The following rates exist: US Switzerland 360-day
The forward rate of th swiss franc is $0.50. The spot rate of the swiss franc is $0.48. The following rates exist:
US Switzerland
360-day borrowing rate ..................................8% 6%
360-day deposite rate......................................7% 5%
360-day forward European options strike price $0.49/SF
Call Put
Premium.............$.03 $.035
360-day futures contract settle price $.049
You are importing SF200,000 worth of merchandise in 360 days
A- Set up the forward hedge
B- Set up the money market hedge
C- Set up the options market hedge
D- Set up the futures market hedge
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