Homework: Lab 05 Question 3, Problem 10-10 (algorithmic) Part 1 of 8 > HW Score: 12.5%, 1 of 8 points O Points: 0 of 1 S

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Homework Lab 05 Question 3 Problem 10 10 Algorithmic Part 1 Of 8 Hw Score 12 5 1 Of 8 Points O Points 0 Of 1 S 1 (195.16 KiB) Viewed 37 times

Homework: Lab 05 Question 3, Problem 10-10 (algorithmic) Part 1 of 8 > HW Score: 12.5%, 1 of 8 points O Points: 0 of 1 Save Mattel Toys. Mattel is a U.S.-based company whose sales are roughly two-thirds in dollars (Asia and the Americas) and one-third in euros (Europe). In September, Mattel delivers a large shipment of toys (primarily Barbies and Hot Wheels) to a major distributor in Antwerp. The receivable, €37 million, is due in 90 days, standard terms for the toy industry in Europe. Mattel's treasury team has collected the following currency and market quotes in the popup window: : . The company's foreign exchange advisors believe the euro will be at about $1.4206/€ in 90 days. Mattel's management does not use currency options in currency risk management activities. Assume a 360-day financial year. a. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of $1.4155/€? The Credit Suisse forward rate of $1.4173/€? The Barclays forward rate of $1.4181/ €? The expected spot rate of $1.4206/€? b. How much in U.S. dollars will Mattel receive in 90 days if the accounts receivable is covered by the Credit Suisse 90-day forward contract? The Barclays 90-day forward contract? c. How much in U.S. dollars will Mattel receive in 90 days with a money market hedge? d. Advise Mattel on which hedging alternative is probably preferable. a. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of $1.4155/€? $ (Round to the nearest dollar.)