You start working for a US company based in Cleveland. Your company has export-import transactions with a
Question:
You start working for a US company based in Cleveland. Your company has export-import transactions with a few businesses in Switzerland and you handle all such international transactions. Your company is a valued client of a major local bank and the bank sends the exchange rates daily to your office via email. You pull out the bills due for collection (accounts receivable) and payments (accounts payable) today and start reading the following outright quotes for Swiss Francs against the dollar (CHF/$) from your bank.
Is the Swiss franc (CHF) poised to become strong or weak against the dollar between now and future?
What would you receive if you sold CHF 1,000,000 million spot?
Are you an exporter or importer in this transaction?
What would it cost for you to purchase CHF 500,000 three-months forward?
Are you an exporter or importer in this transaction?
Using mid-rates, calculate the annualized premium or discount for Swiss Francs against the dollar for 3-Month Forward. Use negative sign for discount
Business and Administrative Communication
ISBN: 978-0073403182
10th edition
Authors: Kitty o. locker, Donna s. kienzler