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ULLIS USS 0160 3) (5 pts) (Ignore Bid/Ask Spread) Suppose your company has accounts receivable of 100,000 Euros that will be paid in 30 days.
ULLIS USS 0160 3) (5 pts) (Ignore Bid/Ask Spread) Suppose your company has accounts receivable of 100,000 Euros that will be paid in 30 days. The EUR:USD is currently trading at $1.1845/1EUR a. If your company was to be paid today, then the receivables would be worth today. $ 119,450 However, assume that your customer will not pay you today but will wait 30 days. In this case: b. If the Euro strengthens to $1.2085 in 30 days your receivables would be worth $ 120.850 c. If the Euro weakens to $1.1521 in 30 days your receivables would be worth s 115,210 d. The transaction would be considered a "natural (Circle one: Long or Short ) position" in the Euro e. In order to "hedge" this position you would need to take a "financial (Circle one: Long or Short ) position" in the Euro
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