Already have an account? Get multiple benefits of using own account!
Login in your account..!
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Evaluation of money-market hedge
Expected receipt after 3 months = $300000
Dollar interest rate over three months = 5.4/ 4 = 1.35%
Dollars to borrow now to have $300000 liability after 3 months = 300,000/ 1.0135 = $296004
Spot rate for selling dollars = 1.7820 + 0.0002 = $1.7822 per £
Sterling deposit from borrowed dollars at spot = 296004/ 1.7822 = $166089
Sterling interest rate over three months = 4.6/ 4 = 1.15%
Value in 3 months of sterling deposit = 166089 × 1.0115 = $167999
The forward market is slightly preferable to the money market hedge for the dollar receipt expected after 3 months.
If the future spot rate of euro at option expiration is uncertain and takes a value within a range of $0.95 to $1.10, construct a contingency graph for a long currency straddle and
International financial system has always been a debatable and crucial focus of the world discussion and it is mainly due to the repression of the economies especially after the cu
Abnormal Earnings Valuation Model Abnormal Earnings Valuation Model is a method to analyse the value of the firm. The value of the firm can be the sum of three components - the
Product Advantages: A firm that has developed a reputation for superior products in the domestic market may find acceptance from the foreign consumers as well. Hence, such firm
T = 520O per week. L=60000. Standard deviation = 7500 R =0.0004.F =50.Find the optimal average cash balance base don the miller orr model
Which type of insurance company generally takes on the greater risks: a life insurance company or a property and casualty insurance company? The risks protected against by cas
How competitive is the market for banking services? A: With above 7,000 banks and thrifts in the U.S., banking is one of the so many competitive industries in the world. Refer
Letter of Credit (LOC) A popular bank instrument begins that a bank has granted the holder an amount of credit equal to the face amount of the L/C. A bank guarantees payment of
Why do financial managers calculate the marginal tax rate? Financial managers utilize marginal tax rates to calculate the future after-tax cash flows from investments. Ever si
Question 1 Describe the importance of commodity finance and sensitive commodities Question 2 Securities purchased by a bank for investment purposes are referred to as seconda
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!
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd