The current spot rate is BP 0.5024/$US.The 3-month forward rate is BP 0.5040/$US.The TE Company expects a payment of BP 100 million in three months.If the firm hedges this transaction in the forward market,what is the $US amount it will receive in three months?
A) $US198.41 million
B) $US199.04 million
C) $US 50.40 million
D) $US 50.24 million
Correct Answer:
Verified
Q18: If the direct quotation for the Euro
Q19: The spot BP/$ exchange rate is 0.5025/$,and
Q20: If a Big Mac costs $2.31 in
Q21: XJ Company from the U.S.is evaluating a
Q22: The dollar interest rate is 6%,and the
Q25: An Australian firm is evaluating a proposal
Q26: The beta of a firm's equity in
Q28: The country with the most favorable political
Q30: Interest rate parity gives the relationship between
Q32: The risk associated with unanticipated actions by
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents