Business, 28.06.2019 18:10 Nopernope11
Smu corp. has future receivables of 4,000,000 nzd in one year. it must decide whether to use options or a money market hedge to hedge this position. use any of the following info to make this decision. verify your answer by determining the estimate (or probability distribution) of dollar revenue to be received in one year for each type of hedge. spot rate of nzd = $0.54one year call option: exercise (0.50) premium (0.07)one year put option: exercise (0.52) premium (0.03)one year deposit rate: 9% (us) 6% (nz)one year borrowing rate: 11 (us) 8 (nz)forecasted spot rate of nzd: rate: 0.50,0.51,0.52probability: 0.2,0.5,0.3
Answers: 2
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Smu corp. has future receivables of 4,000,000 nzd in one year. it must decide whether to use options...
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