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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
9.3Â Â Â Â Â Â Â Â
You have recently graduated from college and accepted a position in the receivables division of Ex-Im-Age Corporation, a software company located in California and specializing in language-independent, icon-based software. Ex-Im-Age has just made a large sale to Germany and has a euro-denominated accounts receivable balance of 1,000,000 that is expected to be received in six months.
a.   ![]()
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Represent Ex-Im-Age’s euro exposure as a risk profile showing: (i) the dollar value of the euro receivable (V$/ ) as a function of the dollar value of the euro (S$/ ), and (ii) change in the dollar value of the euro receivable (�V$/ ) as a function of change in the dollar value of the euro (�S$/ ).
b.   Using risk profiles, show how Ex-Im-Age’s euro exposure can be hedged with each of the following: (i) a currency forward contract, (ii) a currency futures contract, (iii) a money market hedge, and (iv) a currency option contract.
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