1. A U.S. exporter expects to receive TL500,000 in 1 year. Using the information below, what will be the approximate val
Posted: Thu May 26, 2022 7:17 am
1. A U.S. exporter expects to
receive TL500,000 in 1 year.
Using the information below, what will
be the approximate value of these exports in 1 year in U.S. dollars
given that the firm executes a forward hedge?
U.S. deposit rate for 1 year
=
1%
U.S. borrowing rate for 1 year
=
2%
Turkey deposit rate for 1 year
=
8%
Turkey borrowing rate for 1 year
=
10%
TL forward rate for 1 year
=
$0.13
TL spot rate
=
$0.14
a.
$66,000
b.
$65,000
c.
$80,000
d.
$60,000
receive TL500,000 in 1 year.
Using the information below, what will
be the approximate value of these exports in 1 year in U.S. dollars
given that the firm executes a forward hedge?
U.S. deposit rate for 1 year
=
1%
U.S. borrowing rate for 1 year
=
2%
Turkey deposit rate for 1 year
=
8%
Turkey borrowing rate for 1 year
=
10%
TL forward rate for 1 year
=
$0.13
TL spot rate
=
$0.14
a.
$66,000
b.
$65,000
c.
$80,000
d.
$60,000