Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates:
$$\begin{array} { l c c }
& \text { U.S. } & \text { Switzerland } \
\text { 360-day borrowing rate } & 6 \% & 5 \% \
\text { 360-day deposit rate } & 6 \% & 4 \%
\end{array}$$
Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.
A) $101,904
B) $101,923
C) $98,769
D) $96,914
E) $92,307

Question

Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates:
$$\begin{array} { l c c } 
& \text { U.S. } & \text { Switzerland } \
 \text { 360-day borrowing rate } & 6 \% & 5 \% \
\text { 360-day deposit rate } & 6 \% & 4 \%
\end{array}$$
Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.
A) $101,904
B) $101,923
C) $98,769
D) $96,914
E) $92,307

Quizplus · Accepted Answer

The Answer of Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates:
$$\begin{array} { l c c } 
& \text { U.S. } & \text { Switzerland } \
 \text { 360-day borrowing rate } & 6 \% & 5 \% \
\text { 360-day deposit rate } & 6 \% & 4 \%
\end{array}$$
Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.
A) $101,904
B) $101,923
C) $98,769
D) $96,914
E) $92,307

Assume That Parker Company Will Receive SF200,000 in 360 Days