Assume the following information:U.S. deposit rate for 1 yearU.S. borrowing rate for 1 yearNew Zealand deposit rate for 1 yearNew Zealand borrowing rate for 1 yearNew Zealand dollar forward rate for 1 yearNew Zealand dollar spot rate= $.49Also assume that a U.S. exporter denominates itsNew Zealand exports in NZ$ and expects to receiveNZ$500,000 in 1 year. You are a consultant for this firm.= 3%= 4%Group of answer choices$235,841.$264,000.$245,000.$236,127.= 6%= 7%=$.48Using the information above, what will be theapproximate value of these exports in 1 year in U.S.dollars given that the firm executes a money markethedge?

Money Market Hedging is one of the technique used for hedging purposes. It locks in current…

Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year New Zealand borrowing rate for 1 year New Zealand dollar forward rate for 1 year New Zealand dollar spot rate Also assume that a U.S. exporter denominates its New Zealand exports in NZS and expects to receive NZ$500,000 in 1 year. You are a consultant for this firm - 3% = 4% Group of answer choices $235,841. $264,000. $245,000. $236,127. 6% = 7% $.48 - $.49 Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge?

Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year New Zealand borrowing rate for 1 year New Zealand dollar forward rate for 1 year New Zealand dollar spot rate Also assume that a U.S. exporter denominates its New Zealand exports in NZS and expects to receive NZ$500,000 in 1 year. You are a consultant for this firm - 3% = 4% Group of answer choices $235,841. $264,000. $245,000. $236,127. 6% = 7% $.48 - $.49 Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter20: Short-term Financing

Section: Chapter Questions

Problem 4ST

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