Maurice Tutor

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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 12 Jan 2018 My Price 5.00

financial adviser

You are a financial adviser to a U.S. corporation that expects to receive a payment of 40 million Japanese yen in 180 days for goods exported to Japan. The current spot rate is 100 yen per U.S. dollar (E$/Â¥ = 0.01000). You are concerned that the U.S. dollar is going to appreciate against the yen over the next six months.

a. Assuming the exchange rate remains unchanged, how much does your firm expect to receive in U.S. dollars?

b. How much would your firm receive (in U.S. dollars) if the dollar appreciated to 110 yen per U.S. dollar (E$/Â¥ = 0.00909)?

c. Describe how you could use an options contract to hedge against the risk of losses associated with the potential appreciation in the U.S. dollar.

Answers

(5)
Status NEW Posted 12 Jan 2018 10:01 PM My Price 5.00

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