User Account

All Pages

Better sign a forward contract today also not sign a forward

Assignment Help Macroeconomics
Reference no: EM1332655

Calculating Forward contract value for foreign Exchange

Today spot rate £ 1 = US $ 2
3-month forward rate £ 1 = US $ 2.10
After 3-month spot rate £ 1 = US $ 2.20

US importer needs £ 1million payment 3-months later, and he sign a forward contract today

a. How much (US$) does the importer need to pay after 3 months?
b. How much is the cost of hedge?
c. Better sign a forward contract today or not sign a forward contract today? Why?

 

Reference no: EM1332655

Questions Cloud

Changing or improving the hrm system : Write as the CEO/Leader of a company and use this question as a guide to your writing and How can a leader use HRM as a function that will contribute to goals of the organization
Explain online e-business environment : Explain Online e-Business environment what new skills will be required of non-IT personnel
Euthanasia/doctor assisting suicide : What issues involve problems with consent regarding euthanasia/doctor assisted suicide?
Achievement of non-financial measures : Non-financial measures as prime means for achieving firm's strategic objectives - We need to be aware that the value creation process for a business has changed dramatically and now is based in the achievement of non-financial measures.
Better sign a forward contract today also not sign a forward : US importer needs £ 1million payment 3-months later also he sign a forward contract today. Better sign a forward contract today also not sign a forward contract today.
Google doc''s is having an impact on the ms office revenues : Do you think that Google Doc's is having an impact on the MS Office revenues and marketing strategies and potential CSS model of MS products?
Explain e-business website strategy : Explain E-Business Website Strategy and what e-marketing strategy or tactic has been the most successful among e-business today
Pros and cons of long distances agreements : The telephone communication systems and long distances agreements are managed by a telecommunications department in the headquarters that reports to the vice president of finance. Outline pros and cons of both alternatives.
Validate the input begins with a series of characters : expalin how cookies can be used to store information on a computer and how the information can be retrieved by a PHP program. Assume that cookies are not disabled on the client.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd