The current spot rate is $US 0.8543/$AUD. The one-year forward rate is $US 0.8475/$AUD. A U.S. exporter

Fantastic news! We've Found the answer you've been seeking!

Question:

The current spot rate is $US 0.8543/$AUD. The one-year forward rate is $US 0.8475/$AUD. A U.S. exporter denominates its exports to Australia in $AUD and expects to receive $AUD600,000 in one year.

What is the value of these exports in one year in $US given that the firm executes a forward hedge?

Related Book For answer-question

Financial Institutions Management A Risk Management Approach

ISBN: 978-0071051590

8th edition

Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders

See More Books

Posted Date: May 08, 2023 05:10 AM

See More Questions

Assume the following information: US deposit rate for 1 year = 11% US loan rate for 1 year = 12% New Zealand deposit rate for 1 year = 8% New Zealand loan rate Zealand for 1 year = 10% New Zealand...
A Canadian company is exporting lumber to Japan. The sales agreement calls for a payment of 8,000,000 yen to the Canadian company in 90 days. The current spot rate is 86 yen per dollar. a. Is the...
ATZ (US Company) expects to receive a 19 million euros in 90 days from a Australia customer. The current spot rate is S$1.836 per AUD, and the 90 day forward rate is S$1.638 per AUD. In addition, the...
public class Class extends ClassA public classB ( ( Time left 0 0 : 1 2 : 0 3 int init = 1 0 ; super ( 4 0 ) ; O a . . The method super is not defined. b . . No values may be passed to super. O c . ....
Equipment acquired at the beginning of the year at a cost of $125,000 has an estimated residual value of $5,000 and an estimated useful life of eight years. Determine (a) The depreciable cost, (b)...
An entrepreneur named Charles Cheers began making a cereal shaped like a pillow. The new cereal was made from wheat and was called Sliced Whole Wheat. Another entrepreneur named William Wheaty said...
A vertical cylinder containing helium gas is filled with a piston of $50 \mathrm{~kg}$ mass and crosssectional area of $0.025 \mathrm{~m}^{2}$. If the atmospheric pressure outside the cylinder is...
Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are: direct labor cost $500,000, direct labor hours 50,000, and machine...
Consider the following 1) Draw the block diagram of 1:32 Demultiplexer. 2) Implement the 1:16 Demultiplexer in multisim. 3) Draw the truth table. 4) What are the practical applications of DEMUX.
Jennifer's condo is worth $400,000. She owes $300,000 on her 6% fixed-rate mortgage compounds semiannually that have three years remaining in their term. Jennifer pays $2,245 per month towards it....
Describe conditions in China's financial markets. How is this impacting US and world markets. How concerned should US investors be. How does China's real estate market apply.
Anthony Zielinski, a former member of the Milwaukee Board of Supervisors, proposed that the county government sell the organs of dead welfare recipients to help pay off the welfare recipients welfare...
What three things must a firm be able to do to price-discriminate?
What are three ways in which a well-functioning market might have undesirable results?
Demonstrate the welfare loss created by a monopoly.
True or false? Monopolists differ from perfect competitors because monopolists make a profit. Why?
In the U.S.A., oral contraceptives also known as the pill" became popular in the 1960s. The popular use of "the pill" is believed to reduce fertility. 1. [5 points] What does the Malthusian model...
(a) Explain why the concentration of dissolved oxygen in freshwater is an important indicator of the quality of the water. (b) How is the solubility of oxygen in water affected by increasing...
What is the difference between the economic definition of capital and the book value definition of capital? a. How does economic value accounting recognize the adverse effects of credit risk? b. How...
Consider Figure 23-13. What are the prices paid for the following futures options: a. March T-bond calls at $153. b. March 10-year T-note puts at $151.50 c. December Eurodollar puts at 99.50 percent.
What are diseconomies of scale? What are the risks of large-scale technological investments, especially to large FIs? Why are small FIs willing to outsource production to large FIs against which they...
An open concrete flume is to be constructed to carry water from a plant unit to a cooling lake by gravity flow. The flume has a square cross section and is $1500 \mathrm{ft}$ long. The elevation at...
A roof drains into a gutter, which feeds into a downspout with a square cross section (4 in. $x$ 4 in.). The discharge end of the downspout is $12 \mathrm{ft}$ below the entrance and terminates in a...
A concrete-lined drainage ditch has a triangular cross section that is an equilateral triangle, $8 \mathrm{ft}$ on each side. The ditch has a slope of $3 \mathrm{ft} / \mathrm{mile}$. What is the...

The current spot rate is $US 0.8543/$AUD. The one-year forward rate is $US 0.8475/$AUD. A U.S. exporter

Question:

Expert Answer:

To calculate the value of the exports in one year in US given that the firm executes a forwa... View the full answer

Financial Institutions Management A Risk Management Approach

Students also viewed these accounting questions