Your firm is a U.K.-based exporter of bicycles. You have sold an order to a French firm for €1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity. The following were computed without rounding. Select the answer closest to yours.
A)£803,721.49
B)€800,000
C)£780,312.13
D)£72,352.94

Question

Your firm is a U.K.-based exporter of bicycles. You have sold an order to a French firm for €1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.  The following were computed without rounding. Select the answer closest to yours.
A)£803,721.49 
B)€800,000 
C)£780,312.13 
D)£72,352.94

Quizplus · Accepted Answer

The Answer of Your firm is a U.K.-based exporter of bicycles. You have sold an order to a French firm for €1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.  The following were computed without rounding. Select the answer closest to yours.
A)£803,721.49 
B)€800,000 
C)£780,312.13 
D)£72,352.94

Your Firm Is a U