Sonnenschein
A.G.You check with your banker and find out the following: The spot bid and ask rates are USD 1.1001/EUR and USD 1.0953/EUR respectively and the 120-day forward rates are EUR 0.8850/USD and EUR 0.8950/USD.Determine the net payables if Sonnenschein uses a forward hedge to manage its payables.
US$ 100,000*0.8950 = EUR 89,500
A.G., a German retailer of solar panels just bought panels for US $ 100,000 to be paid in 120 days.As the financial manager, you are responsible for making a recommendation on the best hedging choice available to Sonnenschein

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The Answer of Sonnenschein
A.G.You check with your banker and find out the following: The spot bid and ask rates are USD 1.1001/EUR and USD 1.0953/EUR respectively and the 120-day forward rates are EUR 0.8850/USD and EUR 0.8950/USD.Determine the net payables if Sonnenschein uses a forward hedge to manage its payables.
US$ 100,000*0.8950 = EUR 89,500
A.G., a German retailer of solar panels just bought panels for US $ 100,000 to be paid in 120 days.As the financial manager, you are responsible for making a recommendation on the best hedging choice available to Sonnenschein

Sonnenschein A.G.You Check with Your Banker and Find Out the Following