Jones, Inc., a U.S.-based MNC, will need 10 million Thai baht on July 1. It is now
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Question:
Jones, Inc., a U.S.-based MNC, will need 10 million Thai baht on July 1. It is now May 1. The company has negotiated a non-deliverable forward contract with its bank. The reference rate is the baht's closing exchange rate (in $) quoted by Thailand's central bank in 60 days. The baht's spot rate today is $.033. If the rate quoted by Thailand's central bank on August 1 is $.036,
(1) Has the baht appreciated or depreciated against the dollar? Explain.
(2) In 60 days, will the company pay or receive baht?
(3) How much, in dollars, will the company pay or receive?
Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
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