What exchange rate risk does daimler face

Assignment Help Finance Basics
Reference no: EM131305193

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: EM131305193

Questions Cloud

How were the banks expecting to make a profit by buying puts : What is a "bearish call"?- What is a put?- How were the banks expecting to make a profit by buying puts?- What is a "bearish bet"?
How can you improve your personal listening skills : In a 250-300 word response, answer the following question: Do you believe most people are poor listeners or good listeners? What can organizations do to improve listening skills of employees? How can you improve your personal listening skills?
What exchange rate risk does alcoa face in this transaction : What exchange-rate risk does Alcoa face in this transaction?- What alternatives does Alcoa have to hedge this exchange-rate risk?
Investigate performance of an algroithm for preparing images : CS3330: Image and Video Processing. In this assignment, you will design and investigate the performance of an algroithm for preparing images for OCR. You will apply this algorithm in an application context of your choice. You will be required to: ..
What exchange rate risk does daimler face : What exchange-rate risk does Daimler face?- What alternatives does Daimler have to hedge this exchange-rate risk?
Determine the service-related variance for surgical volume : Determine the service-related variance for Surgical Volume. Determine service-related variance for Patient Days. Prepare a flexible budget estimate. Present side-by-side budget, flexible budget estimate, and the actual Surgical Revenues.
Which method is halliburton likely to prefer : If Halliburton enters a forward contract, agreeing to buy ¥250 million in one year at an exchange rate of ¥98 = $1, how many dollars does it need today if it plans to invest the dollars at the U.S. interest rate of 6%?
Find the sum of the first n natural numbers : Write a program to sum a series of numbers entered by the user. The program should first prompt the user for how many numbers are to be summed. It should then input each of the numbers and print a total sum.
Explain the pharmacological aspects of the drug : Select a psychoactive drug that is of pharmacological interest to you, but not one you will review as part of your Critical Review. For this paper, you may choose drugs of abuse; however, the paper must focus on the pharmacology of the drug and no..

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the firm value of operations

If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?

  Net present value (npv) is best defined

Net present value (NPV) is best defined

  Assume your firm is zero-growth and pays all its net income

assume your firm is zero-growth and pays all its net income in dividends each year also assume your firm can borrow

  Determine the right price for a stock

Determine the right price for a stock and discuss the  difference between "price" and "value.

  Assume interest rates for bonds today is 5 for an aaa rated

go to the yahoo finance bonds center.under bonds center click bond screenerclick the corporate check box under bond

  Graph the profit picture of straddle position

Assume an investor establishes a straddle position on Chevron Corp. (CVX) by buying a December 95 call priced at 1.50 and simultaneously buying a December 95 put priced at 3.50. Graph the profit picture of this straddle position.

  Primary goal of financial planning

5) The primary goal of financial planning is to

  What is the economic order quantity

Jones surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bags costs the center $1.50, inventory carrying costs are 20 percent, and the cost of placing an order with it su..

  Which action would most likely violate the standard

Which action would most likely violate the standard on suitability for an investment professional managing individual portfolios?

  Dividends for the past several years

A company has paid $2 per share in dividends for the past several years and plans to continue to do so indefinitely. If an investor's required return is 13%, what is the most she should pay for a share of this firm's stock? A: $15.38 B: $20.00 C: $22..

  Describe a soundscape or two that you have heard recently

Describe a soundscape or two that you have heard recently. During this event, what instruments were playing, and what kind of music would you describe it to be?

  Capital markets securities investment categories

Next, select, describe, and defend your selections of Capital Markets Securities investment categories that would be suitable given the policy parameters and constraints of your directives. With regard to your securities selections:

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!

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