Your firm is a Swiss importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a Swiss franc-denominated receivable with a one-year maturity. The following were computed without rounding. Select the answer closest to yours.
A)SFr. 1,728,900.26
B)SFr. 1,600,000
C)SFr. 1,544,705.88
D)SFr. 800,000

Question

Your firm is a Swiss importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a Swiss franc-denominated receivable with a one-year maturity.  The following were computed without rounding. Select the answer closest to yours.
A)SFr. 1,728,900.26 
B)SFr. 1,600,000 
C)SFr. 1,544,705.88 
D)SFr. 800,000

Quizplus · Accepted Answer

The Answer of Your firm is a Swiss importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a Swiss franc-denominated receivable with a one-year maturity.  The following were computed without rounding. Select the answer closest to yours.
A)SFr. 1,728,900.26 
B)SFr. 1,600,000 
C)SFr. 1,544,705.88 
D)SFr. 800,000

Your Firm Is a Swiss Importer of Bicycles