You are given the following information: EUR deposit rate for 1 year 2% EUR borrowing rate...
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You are given the following information: EUR deposit rate for 1 year 2% EUR borrowing rate for 1 year Australian Dollar deposit rate for 1-year Australian Dollar borrowing rate for 1 year AUD/EUR Strike for 1 Year Call Option AUD/EUR Strike for 1 Year Put Option Premium on Call/Put Option Spot AUD/EUR 3% 3.5% 4.5% 0.70 0.72 0.01 0.67 A French importer needs to pay for its imports from Australia an amount of AUD 2,000,000 in 1 year. Using the information above, what will be the approximate value of these imports in 1 year in EUR if the firm executes Option hedge and a money market hedge? Which one is more feasible for the company? You are given the following information: EUR deposit rate for 1 year 2% EUR borrowing rate for 1 year Australian Dollar deposit rate for 1-year Australian Dollar borrowing rate for 1 year AUD/EUR Strike for 1 Year Call Option AUD/EUR Strike for 1 Year Put Option Premium on Call/Put Option Spot AUD/EUR 3% 3.5% 4.5% 0.70 0.72 0.01 0.67 A French importer needs to pay for its imports from Australia an amount of AUD 2,000,000 in 1 year. Using the information above, what will be the approximate value of these imports in 1 year in EUR if the firm executes Option hedge and a money market hedge? Which one is more feasible for the company?
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Related Book For
Accounting Principles
ISBN: 978-1119048503
7th Canadian Edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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