Question
You (US firm) have accounts receivables (ARs) of SF 1,000,000 in 90 days. Given St of $0.6500 $0.6530 / SF Swiss interest rate of 6%
You (US firm) have accounts receivables (ARs) of SF 1,000,000 in 90 days. Given St of $0.6500 $0.6530 / SF Swiss interest rate of 6% - 6.4% p.a. (find for 90 days) and US interest rate of 8.4% - 8.8% p.a. (find for 90 days).
(a) What are your receivables in dollars if you hedge using money market hedging?
(b) Instead of ARs, if the firm had accounts payables (APs) in Swiss Francs, what are your payables in dollars if you hedge using money market hedging?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Markets And Institutions
Authors: Jeff Madura
13th Edition
0357130790, 978-0357130797
