Page 3 of 10 Page 2: 2 Question 3 (1 point) Soved Ford is a US-based company that imports car components from Europe. Suppose the company has a payable of 15 million due in 6 months, what could the company do using money market hedge if the information is collected as below? 180-day euro investment (deposit) rate: 2.400% 180-day euro borrowing rate 3.400% Page: Page 4 The company could borrow 614,75 million from Europe The company could borrow 14.51 million from Europe Pages: The company could invest C14 82 million in Europe, The company could invest 14.65 million in Europe, Page 6 Pro Page 4 of 10 Page 2 2 Question 4 (1 point) Surved If a U.S.company tries to hedge 500,000 pounds of receivables due in 90 days, what should the company do to hedge the FX risk given the information below: The 90-day forward rate is $2.10/pound, The company should buy 500,000 pounds 3-month forward for $1.05 million cost. Page 3 3 Page 4 4 The company should buy 500,000 pounds 3-month forward for $238,095 cost. The company should sell 500,000 pounds 3-month forward for $23,095 revenue The company should sell 500,000 pounds 3-month forward for $1,05 million Page 5 5 revenue Pape D