The spot rate = US$0.8543/A$; the one year forward rate = US$0.8475/A$. A US exporter denominates its exports to Australia in A$ and expects to receive A$600,000 in one year. What will the value of these exports in one year in US$ given that the firm executes a forward hedge? (Ignore transaction costs)
A) US$508,500
B) US$512,580
C) US$707,965
D) None of the above
Correct Answer:
Verified
Q28: If the peso is traded at a
Q29: The beta of a firm in Switzerland
Q30: Risk associated with unanticipated actions by the
Q32: Big Mac exchange rate provides official exchange
Q34: Which development in recent years has had
Q35: Spot rate = BP 0.5024/US$; 3-month forward
Q36: XJ Company from the USA is evaluating
Q37: The country with the highest score is:
A)
Q38: If the US dollar interest rate is
Q58: Purchasing power parity implies that any differences
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