An Australian exporter WA Co. wants to export goods for 5.22 million Chinese yuan (CNY) and...

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An Australian exporter WA Co. wants to export goods for 5.22 million Chinese yuan (CNY) and receive payment from a Chinese importer, Sing Tao, in one year. WA Co. also wants to minimise its exchange rate risk for receiving CNY5.22 by taking the money market hedging strategy. Calculate the Australian dollar (A$) proceeds from the money market hedging strategy based on the information in Table 1. (Enter the whole number without sign and symbol). For Chinese yuan (CNY) Spot rate One-year forward rate One-year CNY deposit and borrowing rate One-year call options One-year put options For Australian dollar (A$) Spot rate TABLE 1 One-year forward rate One-year A$ deposit and borrowing rate One-year call options One-year put options A$0.4452/CNY A$0.5695/CNY 7.83% Exercise price = A$0.58 Premium = A$0.03 Exercise price = A$0.61 Premium = A$0.05 CNY3.4981/A$ CNY2.3483/A$ 4.13% Exercise price = CNY1.69 Premium = CNYO.19 Exercise price = CNY2.17 Premium CNY0.15 Answer: An Australian exporter WA Co. wants to export goods for 5.22 million Chinese yuan (CNY) and receive payment from a Chinese importer, Sing Tao, in one year. WA Co. also wants to minimise its exchange rate risk for receiving CNY5.22 by taking the money market hedging strategy. Calculate the Australian dollar (A$) proceeds from the money market hedging strategy based on the information in Table 1. (Enter the whole number without sign and symbol). For Chinese yuan (CNY) Spot rate One-year forward rate One-year CNY deposit and borrowing rate One-year call options One-year put options For Australian dollar (A$) Spot rate TABLE 1 One-year forward rate One-year A$ deposit and borrowing rate One-year call options One-year put options A$0.4452/CNY A$0.5695/CNY 7.83% Exercise price = A$0.58 Premium = A$0.03 Exercise price = A$0.61 Premium = A$0.05 CNY3.4981/A$ CNY2.3483/A$ 4.13% Exercise price = CNY1.69 Premium = CNYO.19 Exercise price = CNY2.17 Premium CNY0.15 Answer:

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Calculate the Australian dollar A proceeds from the money market hedging strategy Spot Rate for CNY ... View the full answer