Assume now is 1st September 2020. Hillview Sdn. Bhd. (Hillview) has exported its frozen seafood amounting to €50,000 to Germany is a member of the European Union. The receipt is expected to fall due in two months’ time. Due to uncertainty of the financial market, the finance manager wishes to hedge the risk exposure faced by the company using forward contract.   Foreign exchange rates:   MYR/EUR(€) Spot                          4.1250 - 4.1259 2 months forward       4.2250 - 4.2258   Required:   i)The company intends to hedge against the foreign exchange risk of the above transaction using a two-months forward. Calculate the expected amount in Ringgit Malaysia (RM) that Hillview is expected to receive in due course.                                                                                                 ii)Differentiate between a spot market and futures market.

On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.

1-) Assume that a U.S. based investor began applying a carry trade strategy by borrowing in the U.S. and investing in Turkey, as of December 2023. The corresponding interest rates are 3% in the U.S. and 40% in Turkey. The current spot rate between TL and USD is 29.2TL per USD. The strategy will be in place for a year, hence will end in December 2024. Note that the investor is taking an exchange rate risk here. If he decides to hedge some of that exchange rate risk via selling Turkish lira forward, what is the price range for the contract that is acceptable for her/him? 2-) Assume that a U.S.-based investor began applying a carry trade strategy by borrowing in the U.S. and investing in Turkey as of December 2023. The corresponding interest rates are 3% in the U.S. and 40% in Turkey. The current spot rate between TL and USD is 29.2TL per USD. The strategy will be in place for a year and will end in November 2023. Note that the investor is taking an exchange rate risk here. To hedge some…

You are US company, 500,000 BP (British Pound) payable to UK in one year. Answer in terms of US$.   Information for Forward Contract: Forward exchange rate (one yr): 1.54 $/BP   Information for Money Market Instruments (MMI): Current exchange rate: 1.50 $/BP Investment return at Aerion Fund Management (in UK): 6% annual Interest rate of borrowing from Bank of America (in USA): 2% annual   Information you need for Currency Options Contract: Options premium: 0.015 $/BP Interest rate of borrowing from Bank of America (USA): 2% annual Allowed to exercise options at 1.54 $/BP   What are the costs of MMI? (Answer in US$ of course. You are US company!)

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