Question
You are a new assistant treasurer of Summit Enterprise, Inc. (American firm) based in New Jersey. Your firm has created an A/P 10,000,000 (denominated in
You are a new assistant treasurer of Summit Enterprise, Inc. (American firm) based in New Jersey. Your firm has created an A/P 10,000,000 (denominated in ) due six months from today. Your firm is facing the following market data: Citibanks FX Quotations: Spot rate (bid) = $1.2896/ Spot rate (Asked) = $1.2916/ 6-month forward rate (bid) = $1.2944/ 6-month forward rate (Asked) = $1.2998/ The currency market is highly volatile. Your firm attempts to manage its currency exposures through hedging. If your firm hedged 100% in the forward market, it would lock-in the $ cost to pay 10,000,000 account payable at:
| $12,896,000 | ||
| $12,944,000 | ||
| $12,998,000 | ||
| $12, 916,000 |
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International Marketing And Export Management
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
8th Edition
1292016922, 978-1292016924
