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 dollar forward interest rate for 1 year = $0.40 New Zealand dollar spot rate = $0.39 Also assume that a US exporter denominates its exports to New Zealand in dollars New Zealanders and expects to receive NZ$600,000 in 1 year. You are a consultant for this firm. Using the above information, what will be the approximate value of these exports in 1 year in US dollars given that the company runs a money market hedge?

Answer rating: 100% (QA)

To calculate the approximate value of the exports in 1 year in US dollars we need to ... View the full answer