Will it be better to use forward hedge or money market hedge, Microeconomics

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Will it be better to use forward hedge or money market hedge

Assume the following information:
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

Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. Would it be better off using a forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge.

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Microeconomics: Will it be better to use forward hedge or money market hedge

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Microeconomics: Will it be better to use forward hedge or money market hedge

Reference No:- TGS058024

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Paper on native americans

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Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Will it be better to use forward hedge or money market hedge

Reference No:- TGS058024

Recent Questions Asked Microeconomics

Q : Paper on native americans

Q : Journal entry to record the acquisition of land

Q : Average number of planes in the system

Q : Prepare the journal entries required to adjust the inventory

Q : Will it be better to use forward hedge or money market hedge

Q : Entry to record the interest accrual

Q : Standard deviation of the sampling distribution

Q : Explain the economic advantages of swap agreements

Q : Determine the Investment account

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