i will 10 upvotes urgent Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The following information is available in current and forward markets: 180‑day U.S. interest rate = 8% 180‑day British interest rate = 9% 180‑day forward rate of British pound = $1.50 Spot rate of British pound = $1.48 How much will Riverside Corp. receive in dollars in 180 days fare if it uses a money market hedge for the 400,000 pounds? Please show your steps, thank you!

i will 10 upvotes urgent Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The following information is available in current and forward markets: 180‑day U.S. interest rate = 8% 180‑day British interest rate = 9% 180‑day forward rate of British pound = $1.50 Spot rate of British pound = $1.48 How much will Riverside Corp. receive in dollars in 180 days fare if it uses a money market hedge for the 400,000 pounds? Please show your steps, thank you!

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 8P

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Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The following information is available in current and forward markets: 180‑day U.S. interest rate = 8% 180‑day British interest rate = 9% 180‑day forward rate of British pound = $1.50 Spot rate of British pound = $1.48 How much will Riverside Corp. receive in dollars in 180 days fare if it uses a money market hedge for the 400,000 pounds? Please show your steps, thank you!
A UK company owes an American company $100,000 due to be paid in three months. The company wishes to avoid exchange rate risk, so borrows enough in sterling now and converts it immediately to dollars which are invested to bring in the required amount in three months' time. The following information is available: Spot rate $/£ 1.7755 - 1.7765 3-month interest rates: Sterling 3.250% US dollar 2.425% How much will the UK company have to borrow now to clear the debt in three months? A. £54,958 B. £54,989 £56,744 D. £56,775 C.
American Airlines is trying to decide how to go about hedging 70 million swiss francs in ticket sales receivable in 180 days. Suppose it faces the following exchange and interest rates. Spot rate: $0.6433-42/SFr Forward rate (180 days): $0.6578-99/SFr DM 180-day interest rate (annualized): 4.01%-3.97% U.S. dollar 180-day interest rate (annualized): 8.01%-7.98% What is the hedged value of American’s ticket sales using a money market hedge? Assume the first interest rate is the rate at which money can be borrowed and the second one the rate at which it can be lent. A $42,999,212 B $45,907,296 C $41,450,291 D $35,501,223
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X is considering whether to accept a 10% discount on buying imported machinery from China at USD 1800 each (normal price USD 2000) OR continue to buy them in Austalta at AUD 2300 each. Payment is to be made on arrival of the machines in 1 year's time. Relevant information: Exchange Rate (Spot) AUD/ USD: 0.8000 Forward Exchange Rate AUD/USD: 0.7700 Import Co borrowing interest rate is 6%. Available USD 1 year deposit rate is 1%. Which one of the below should X do? (a) Continue to purchase at AUD 2300. (b) Accept the discount, buy at USD 1800 and purchase the USD now at AUD/USD 0.8000. (c) Accept the discount, buy at USD 1800 and purchase the USD in one year at AUD/ USD 0.7700. (d) Buy the machines at the undiscounted price of USD 2000 and purchase the USD in one year at AUD/USD 0.8000.
Cook Manufacturing (US): (Account Payable: Pay 10,000,000 Yen, 90 days from now) Spot rate : 100 Yen/$ Japan 3 month borrowing interest rate: 2.0% / 90 days Japan 3 month investment interest rate: 1.5% / 90 days How many USD will Cook Manufacturing convert into Yen today to pay the Japanese supplier 90 days from now.
A Canadian supplier is offering two options to his American client to pay for an equipment: paying 13,000 Canadian dollars now or paying 10,000 US dollars in 6 months. If the annual interest rate for the Canadian dollar is 5% and for the US dollar is 8%, what is the "implied" exchange rate? Question 5 options: CAD0.7581/USD. CAD1.3520/USD. CAD0.7505/USD. CAD1.3190/USD. CAD1.3325/USD. CAD0.7396/USD.
XYZ Corporation, located in the United States, has an accounts payable obligation of ¥1500 million payable in six months to a bank in Tokyo. The current spot rate is ¥116/$1.00 and the six month forward rate is ¥109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. a) What is the future dollar cost of meeting this obligation using the money market hedge a. $92,307. b. $ 19582168.89 c. $13054779.26 d. $ 6589854.111