Business, 07.09.2021 20:40 Lesquirrel

Chronos Time Pieces. Chronos Time Pieces of Boston exports watches to many countries, selling in local currencies to stores and distributors. Chronos prides itself on being financially conservative. At least 70% of each individual transaction exposure is hedged, mostly in the forward market, but occasionally with options. Chronos' foreign exchange policy is such that the 70% hedge may be increased up to a 120% hedge if devaluation or depreciation appears imminent. Chronos has just shipped to its major North American distributor. It has issued a 90-day invoice to its buyer for . The current spot rate is $/, the 90-day forward rate is $/. Chronos' treasurer, Manny Hernandez, has a very good track record in predicting exchange rate movements. He currently believes the euro will weaken against the dollar in the coming 90 to 120 days, possibly to around $/. a. Evaluate the hedging alternatives for Chronos if Manny is right (Case 1: $/) and if Manny is wrong (Case 2: ). What do you recommend? b. What does it mean to hedge 120% of a transaction exposure? c. What would be considered the most conservative transaction exposure management policy by a firm? How does Chronos compare?

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 20:50

Your goal is to have $2,000,000. you have a total of $40,000 today. you invest the $40,000 and want to add to it each month. at 10% annual interest, how much do you need to invest each month in order to bring the total up to $2,000,000 30 years from now?

Answers: 2

Answer

Business, 22.06.2019 13:30

After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of schenkel enterprises. unfortunately, you will be the only person voting for you. the company has 375,000 shares outstanding, and the stock currently sells for $40, if there are four seats in the current election, how much will it cost you to buy a seat?

Answers: 2

Answer

Business, 22.06.2019 19:50

The interaction of individual choices because a type of fish is on the verge of extinction, the government imposes rules that prohibit fishing in the publicly owned spawning grounds. at first owners of fshing bouts complain about this restriction on where they can fish, but soon they notice that the number of adult fish swimming outside the protected area is much higher than it was before. with the restriction, each fishing boat ends up catching more fish than it did before the r which of the following principles of economic interaction best describes this scenario? o there is a tradeoff between equality and efficiency o markets usually lead to efficiency. o when markets do not achieve efficiency,government intervention can improve overall welfare o markets allocate goodseffectively

Answers: 1

Answer

Business, 22.06.2019 23:00

The five steps to financial success a. five money myths b. five foundations

Answers: 1

Answer

You know the right answer?

Chronos Time Pieces. Chronos Time Pieces of Boston exports watches to many countries, selling in lo...

Questions