Jetta production cost in 2002 and 2003 was 12,000 Euro per Jetta. Jettas were sold in US at $13,000 in 2002 and 2003. Forward hedge exchange rate was 1 $/Euro in 2003. The market exchange rate was 1.15 $/Euro (i.e. rate without hedge) in 2003. If 8,000 Jetta were sold in US, in 2003, by 60% forward hedge and 40% not hedged.

What would be profits or loss from sales of 8,000 Jetta in US?

Answer rating: 100% (QA)

To calculate the profits or losses from the sales of 8000 Jettas in the US in 2003 we need to consid... View the full answer