To hedge the exposure in the previous problem, Ragnetto can alternatively use a money market hedge. Ragnetto can borrow/lend U.S. dollars at an annualized interest rate of 12% and Taiwanese dollars at an annualized interest rate of 8%. What is the hedged dollar value of the receivable in 3 months (if Ragnetto were to use a money market hedge)

Answer rating: 100% (QA)

To hedge the exposure using a money market hedge Ragnetto can borrow or lend in the respective curre... View the full answer