What will be the cost in dollars if you use the forward

Assignment Help Financial Management
Reference no: EM132049992

While you were visiting London this past weekend, you purchased a Jaguar for 70,000 (pounds). The Jaguar will be delivered to you later. The payment of 70,000 (pounds) is due exa,ctly in three months.

You would like to lock in the cost of the 70,000 pounds now, annd have decided to use a forward contract to hedge. The current spot exchange rate is $1.68/pound. The three month forward exchange rate is $1.70/pound.

What will be the cost in dollars if you use the forward hedge?

Reference no: EM132049992

Questions Cloud

Describe the information that you received from the quote : Describe the information that you received from the quote of the bond. You have to explain each number and symbol that appears in the bond quotation.
Number of boys being double the number of girls : Number of student in a college in 2005 was 510 . of these 480 were boys In 2010 the number of boys increased by 100%
How network standards such as the osi help : Discuss how network standards such as the OSI help to ensure interoperability between products made by different manufacturers.
Calculate the npv and irr for the proposed project : What is the initial cost of the project? What are the expected operating cash flows for 2018 thru 2021?
What will be the cost in dollars if you use the forward : While you were visiting London this past weekend, you purchased a Jaguar for 70,000 (pounds). The Jaguar will be delivered to you later.
Evaluate the vintages return on equity : Vintage, Inc. has a total asset turnover of 1.55 and a net profit margin of 3.65 percent. The total assets to equity ratio for the firm is 2.4.
Has apple made a gain or loss and by how much : By the end of the month, it had unexpectedly dropped to $1.00 to the Euro. Has Apple made a gain or loss and by how much?
Characteristics that identifies it as technical writing : Describe an example of technical writing that you have written or encountered in the past week at work, home or school
Elitist elements gain control of government : Part of the idea of totalitarianism is that certain elitist elements gain control of government and impose their view on others.

Reviews

Write a Review

 

Financial Management Questions & Answers

  Calculate the dollar-weighted rate of return

On January 1, an investment account is worth 500. On July 1, the value has increased to 600 and W is withdrawn from the account. On November 1, the value is 280 and 120 is deposited in the account. On January 1 of the following year, the investment a..

  What value would you assign to this bond

The required return on this bond is 9 percent. What value would you assign to this bond?

  Find the stock price

The dividend-payout ratio is 20% and the return on retained earnings of 15%. If the discount rate is 14%, find the stock price:

  Interest rate or payment of the same type of investment

Find the value of an investment (perpetuity) that pays you $6,000 annually forever but returns no principle. Find the interest rate or payment of the same type of investment.

  Net present value with different compound increasing factors

Calculate net present value. Calculate net present value with different compound increasing factors:

  The current interest rate for the country of elbonia

The current interest rate for the country of Elbonia (ELB) is 6%. will the currency of Bacteria be more or less valuable in relation to that of Elbonia?

  What is the operating cash flow or OCF

Hamble, Inc., has sales of $19,070, costs of $10,460, depreciation expense of $2,530, and interest expense of $1,600. If the tax rate is 35 percent, what is the operating cash flow, or OCF?

  What growth rate is expected for company stock price

If the company plans to pay a dividend of $3.50 next year, what growth rate is expected for the company’s stock price?

  Find the terminal stock price using benchmark pe ratio

Company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using benchmark PE ratio

  Help based on the information below calculate the weighted

based on the information below calculate the weighted average cost of capital. great corporation has the following

  The present value of the coupon stream represents

The present value of the coupon stream represents ______ of the total bond's value.

  Applied to organization holding debt

Define the ratings that are applied to organization's holding debt.

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