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Iteru [2.4K]
3 years ago
14

Your firm is a U.K.-based 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.
1. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.
Contract size Country U.S. $ Equiv. Currency per U.S. $
£ 10,000 Britain (pound) $ 1.9600 £ 0.5102 interest APR rates
12 months forward $ 2.0000 £ 0.5000
€ 10,000 Euro $ 1.5600 € 0.6410 i$ = 1 %
12 months forward $ 1.6000 € 0.6250 i€ = 2 %
SFr. 10,000 Swiss franc $ 0.9200 SFr. 1.0870 i£ = 3 %
12 months forward $ 1.0000 SFr. 1.0000 iSFr. = 4 %
The following were computed without rounding. Select the answer closest to yours.
a. €1,244,212.10
b. €1,225,490.20
c. €1,219,815.78
d. €1,250,000
Business
1 answer:
dolphi86 [110]3 years ago
4 0

Answer:

A. €1,244,212.10

Explanation:

Contract Size Country U.S. $ equiv. Currency per U.S. $

£ 10,000 Britain (pound) $ 1.9600 £ 0.5102 interest APR

12 months forward $ 2.0000 £ 0.5000 rates

€ 10,000 Euro $ 1.5600 € 0.6410 i$ = 1 %

12 months forward $ 1.6000 € 0.6250 i€ = 2 %

SFr. 10,000 Swiss franc $ 0.9200 SFr. 1.0870 i£ = 3 %

12 months forward $ 1.0000 SFr. 1.0000 iSFr. = 4 %

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Answer:

A. Price makers

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Explanation:

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Answer:

Units transferred out = 760

Explanation:

If we assume that all units are completed in the order of arrival i.e (FIFO), then the units transferred out is the sum of the opening inventory and the units started and completed in the period. The units started and completed in the period is referred to fully-worked.

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