What exchange-rate risk does daimler face

Assignment Help Finance Basics

Reference no: EM131304347

Suppose that Daimler AG, which manufacturers Mercedes-Benz automobiles, sells 5 million worth of automobiles to U.S. importers. If the current exchange rate is $1.22 = 1, and Daimler agrees to accept payment of $6.1 million in 90 days, answer the following questions.

a. What exchange-rate risk does Daimler face?

b. What alternatives does Daimler have to hedge this exchange-rate risk?

c. Give a specific example of how Daimler could hedge this exchange-rate risk.

Reference no: EM131304347

Questions Cloud

What hrm activities or functions were affected by the change : In your opinion, what aspects of the changes at SAP would be most difficult for the German employees? Why? Which would be most difficult for the SAP employees in other countries? Why?What HRM activities or functions were affected by the changes de..

What is a bearish call : According to an article in the Wall Street Journal, in late 2009, "Between Dec. 9 and 11, some big European and U.S. banks made bearish calls on the euro by buying one-year euro ‘puts.'"

What abilities will help juanita succeed-potentially fail : Besides cultural differences, what other factors might affect human resource management with this international office?What abilities will help Juanita succeed and potentially fail in this assignment as an expatriate?What has been the reason for the..

Explain potential costs and benefits whenever appropriate : It is important that you discuss potential costs and benefits whenever appropriate, again keeping in mind that what might be beneficial for some parties or entities is likely to be costly to others.

What exchange-rate risk does daimler face : Give a specific example of how Daimler could hedge this exchange-rate risk.

Analyze the data using the regression model : Analyze the data using the regression model y = b0 + b1x, where y = time to approve and mail a claim (weekly average), x = 0 for the old process, and x = 1 for the new process. How does this model measure the effect of the process change?

What does the economist mean by undervalued : Did the Economist find the dollar price of a Big Mac in China at the current yuan-dollar exchange rate to be higher or lower than the price of a Big Mac in the United States?

What did you consider critical to the success of a hr : Determine some of the salient points about factors that drive strategy. What stood out for you?What did you consider critical to the success of a HR-business strategy?

Explain what strategy would you use to reduce invoice errors : What is the nature of the effects of the factors studied in this experiment? What strategy would you use to reduce invoice errors, given the results of this experiment?

User Account

All Pages