Question: Hi please help with a , b , c , and d . Kept getting it wrong. Thank you! Najafi Company. Najafi Company, U .
Hi please help with a b c and d Kept getting it wrong. Thank you!
Najafi Company. Najafi Company, USbased manufacturer of industrial equipment, just purchased a Korean company that produces
plastic nuts and bolts for heavy equipment. The purchase price was million Korean won KRW KRW million has already
been paid, and the remaining KRW million is due in six months. The current spot rate is KRWUSD and the month
forward rate is KRW USD The month Korean won interest rate is per annum, the month US dollar rate is per
annum. Najafi can invest at these interest rates, or borrow at per annum above those rates. A month call option on won with a
KRW USD strike rate has a premium, while the month put option at the same strike rate has a premium. Najafi's
weighted average cost of capital is Compare alternate ways below that Najafi might deal with its foreign exchange exposure.
a How much in US dollars will Najafi pay in months without a hedge if the expected spot rate in months is assumed to be
KRW USD KRW USD
b How much in US dollars will Najafi pay in months with a forward market hedge?
c How much in US dollars will Najafi pay in months with a money market hedge?
d How much in US dollars will Najafi pay in months with an option hedge if the expected spot rate in months is assumed to be less
than KRW USD To be KRW USD
a How much in US dollars will Najafi pay in months without a hedge if the expected spot rate in months is assumed to be
KRW USD
USD Round to the nearest cent.
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