Your firm is a U K based exporter of shoes You have sold an order to a French firm for 1,000,000 worth of shoes Payment from the French firm (in euro) is due in 12 months Use a money market hedge to redenominated this one year receivable into a pound denominated receivable with a one year maturity Contract Size Country U S $ equiv Currency per U S $ 10,000 Britain (pound) $ 1 9600 0 5102 interest APR 12 months forward $ 2 0000 0 5000 rates 10,000 Euro $ 1 5600 0 6410 i$ 1 12 months forward $ 1 6000 0 6250 i 2 SFr 10,000 Swiss franc $ 0 9200 SFr 1 0870 i 3 12 months forward $ 1 0000 SFr 1 0000 iSFr 4 The following were computed without rounding Select the answer closest to yours 72,352 94 803,721 49 800,000 780,312 13

Question

Your firm is a U K  based exporter of shoes  You have sold an order to a French firm for 1,000,000 worth of shoes  Payment from the French firm (in euro) is due in 12 months  Use a money market hedge to redenominated this one year receivable into a pound denominated receivable with a one year maturity  Contract Size Country U S  $ equiv  Currency per U S  $ 10,000 Britain (pound) $ 1 9600 0 5102 interest APR 12 months forward $ 2 0000 0 5000 rates 10,000 Euro $ 1 5600 0 6410 i$   1   12 months forward $ 1 6000 0 6250 i   2   SFr  10,000 Swiss franc $ 0 9200 SFr  1 0870 i   3   12 months forward $ 1 0000 SFr  1 0000 iSFr    4   The following were computed without rounding  Select the answer closest to yours  72,352 94 803,721 49 800,000 780,312 13

Accepted Answer

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Contract Size		Country	U.S. $ equiv.		Currency per U.S. $
	10,000	Britain (pound)	$	1.9600		0.5102	interest			APR
		12 months forward	$	2.0000		0.5000	rates
	10,000	Euro	$	1.5600		0.6410		i$	=		1	%
		12 months forward	$	1.6000		0.6250		i	=		2	%
SFr.	10,000	Swiss franc	$	0.9200	SFr.	1.0870		i	=		3	%
		12 months forward	$	1.0000	SFr.	1.0000		iSFr.	=		4	%

		72,352.94
		803,721.49
		800,000
		780,312.13

Question

Your firm is a U.K.-based exporter of shoes. You have sold an order to a French firm for 1,000,000 worth of shoes. Payment from the

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