Tina is the C.F.O of Tint Inc., an Australian MNC. Tint will receive a payment of Rs.3,850,000
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Question:
Tina is the C.F.O of Tint Inc., an Australian MNC. Tint will receive a payment of Rs.3,850,000 in 1-year from a customer in Sri Lanka. The spot rate is Rs.120 / A$. The 1-year interest rate is 3.5% in Australia and 8.5% in Sri Lanka, respectively. Tina decides to use a money market hedge to mitigate all of the exchange rate risk. What is the value of the receivables in A$?
A. A$ 30,605.
B. A$ 31,492.
C. A$ 32,083.
D. A$ 33,206.
E. A$ 34,810
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