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An American firm owes SFr 6,000,000.00 payable in one year. The current spot is $1.2083/SFr. A Swiss bank is paying 4.50
Posted: Sun May 08, 2022 10:32 am
by answerhappygod
- An American Firm Owes Sfr 6 000 000 00 Payable In One Year The Current Spot Is 1 2083 Sfr A Swiss Bank Is Paying 4 50 1 (20.55 KiB) Viewed 23 times
An American firm owes SFr 6,000,000.00 payable in one year. The current spot is $1.2083/SFr. A Swiss bank is paying 4.50% on deposits or will lend at 7.00%. A U.S.bank is paying 1.50% or will lend at 5.50%. The firm would like to hedge this exposure with money market hedging. How much do they need to borrow today? SF 5.741,626.79 OSFr 5,607,476.64 $6,775,514,02 None of the alternatives $6,937,607.65