1. American Airlines is trying to decide how to go about hedging SFr70 million in ticket sales...

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1. American Airlines is trying to decide how to go about hedging SFr70 million in ticket sales receivable in 180 days. Suppose it faces the following exchange and interest rates. Spot rate: $0.6433-42/SFr Forward rate (180 days):$0.6578-99/SFr SFr 180-day interest rate (annualized): 4.01%-3.97% U.S. dollar 180-day interest rate (annualized): 8.01%-7.98%

Quiz: What is the break-even point of forwarding rate? Is this rate bid or ask rate?

Posted Date: Nov 11, 2021 07:43 AM

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1. American Airlines is trying to decide how to go about hedging SFr70 million in ticket sales...

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hedged value of Americans ticket sales using Forwards Amount receicable Forward rate ... View the full answer

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