Y8

Question 10 2.5 pts ABC Corp. is a U.S.-based importer of Italian bicycles. In one year, ABC Corp. will owe E100,000 to an Italian supplier. The spot exchange rate is $1.19 = E1.00, and the one-year forward exchange rate is $1.16 = E1.00, the one-year interest rate in Italy is it = 3.5%, the one-year interest rate in the US is 5.5%. What would be the dollar cost in one year of this payable if ABC Corp. used a forward market hedge? O $119,000 O $116,000 O $103,500 O $105,500 Question 11 2.5 pts Same facts as above: what would be the dollar cost in one year of this payable if ABC Corp. used a money market (i.e. synthetic forward) hedge? O $121,299 O $114,976 O $119,000 O $116,000