Question: Please Help me answer these questions. This is all the information is have and I am lost. Anything helps!!! Thank you for all your time
Please Help me answer these questions. This is all the information is have and I am lost. Anything helps!!! Thank you for all your time in advance!!!!!
Country Quantity Price Revenue Spot Rate 6-Month Forward Rate Italy 3,920 E 41,730 (163,581,600 $1.2307/16 $1.2485/1E Switzerland 675 F49,094 F33,138,450 $1.0485/1F $1.0685/1F England 535 E43,132 (23,075,620 $1.3840/1E $1.3962/1E Country Cost Spot Rate 5-Month Forward Rate Switzerland F66,151,533 $1.0488/1F $1.0685/1F China 127,645,290 *6.3346/1$ *6.4020/1$ Russia P17,012,486 P56.6589/1$ P57.7081/1$ Mexico ($) MP19,139,047 MP18.5887/1$ MP19.1780/1$ France (29,771,851 $1.2307/16 $1.2485/16 Germany E40,404,655 $1.2307/16 $1.2485/16 Finland (10,632,804 $1.2307/16 $1.2485/1E Italy E31,898,412 $1.2307/16 $1.2485/16 9) If the cost of capital is 11.5675%, what is the cost to Tracero of the option strategy? 10) What are the fundamental differences for Tracero between hedging with forward and futures contracts and hedging with option contracts. 11) What is the break-even spot rate between the forward and option strategies
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