On January 10, Volkswagen agrees to import auto parts worth 15 million USD from the USA. The

Fantastic news! We've Found the answer you've been seeking!

Question:

On January 10, Volkswagen agrees to import auto parts worth 15 million USD from the USA. The parts will be delivered on March 4 and are payable immediately in USD. VW decides to hedge its position by entering into IMM futures contracts. The spot rate is $0.8947/Euro and the March futures price is $0.9002. Each contract is for 125000 Euros. On March 4, the spot rate turns out to be $0.8922/Euro while the March futures price is $0.8900/Euro. What is the profit/loss on VW's futures position?

Please show all work

a. 13,332,000 Euros

b. 8,888,800 Euros

c. 13230000 Euros

d. 8918000 Euros

Posted Date: May 18, 2024 07:05 AM

See More Questions

Miami Tropical stock has a beta of 1.25. The risk-free rate of return is 4.34 percent and the market risk premium is 9.02 percent. What is the expected rate of return on this stock? 10.23 percent...
For what types of products are psychological pricing strategies most likely to be used?
What is Boolean logic? Provide three examples using everyday terms.
The Smith Company owns no plant assets and had the following income statement for the year: Additional information about the company includes: Use the preceding information to calculate the cash flow...
MonkeySuits, Inc. makes costumes for movies and television shows. Jay Tribini, the companys owner, prepared the following estimates for the upcoming year: Manufacturing overhead cost ......$660,000...
United Pigpen (UP) is considering a proposal to manufacture high protein hog feed. The project would make use of an existing warehouse, which is currently rented out to a neighboring firm. The next...
Product I's inventory is managed according to the (Q,R) model. The safety stock for Product I is 120. The lead time for replenishing Product I's inventory is 3 weeks, and the weekly demand for...
An egg weighs 56.7 grams. A box full of eggs weighs 68.6 kg and the empty box weighs 5.000 lbs. How many eggs are in the box.
what ways does the prudent application of leverage facilitate the attainment of organizational objectives amidst multifaceted challenges ?
Two reservoirs are linked by the system of pipes shown below in Figure Q4. The pipe properties are listed in Table Q4. The water level in Reservoir B is 120 m, while the water level in Reservoir C is...
A long sequence of characters needs to be transmitted efficiently so a programmer decides to use Huffman encoding to encode it. A distribution count study of typical data yielded the adjacent...
Working capital cash flow. Cool Water, Inc. sells bottled water. The firm keeps in inventory plastic bottles at 10% of the monthly projected sales. These plastic bottles cost $0.004 each. The monthly...
3. Iterative root finding Consider the following dynamical system XN+1 = g(XN). Given we know x at some time N in the program we simply compute the next value of x by assigning it the value g(x)....
Using thermodynamic data from Appendix 4, calculate G at 258C for the process: 2SO 2 (g) + O 2 (g) 88n 2SO 3 (g) where all gases are at 1.00 atm pressure. Also calculate DG8 at 258C for this same...
Access the Institute of Management Accountant's report titled "The Data Analytics Implementation Journey in Business and Finance," (https://www.imanet.org/...
Match each item in the value chain, 1 through 7, with an example of an artificial intelligence initiative, choosing from items $a$ through $g$. Value Chain 1. Research and development Artificial...
Go to PWC.com and select "Services" and then "Data and Analytics" (under "Consulting"). Choose a topic and write about how PWC is using data analytics and/or artificial intelligence to help its...

On January 10, Volkswagen agrees to import auto parts worth 15 million USD from the USA. The

Question:

Expert Answer:

Students also viewed these finance questions