In a MNC has peso payables coming due in 90 days, and is certain the the peso will appreciate.   That means the MNC will need to obtain pesos to make payment.  Given its certainty on the appreciation, the MNC should: Group of answer choices sell pesos forward. purchase peso currency put options. purchase peso currency call options. purchase pesos forward.

Use the information below to calculate the expected gain or loss on the carry trade strategy for an initial borrowed amount of 1,000,000 (you will have to determine the currency of borrowing). Keep at least two decimals in your calculations but round up or down at the end (enter the final answer without decimals). Current spot rate of Polish zloty (PLN/EUR) Expected future spot rate of of zloty (PLN/EUR) in three months Annualized three-month interest rate on Polish zloty (%) Annualized three-month interest rate on euros (%) 3,119,971 135,769 margin of error +/- 10 4.64 4.11 3.77 1.53

There are two possible states of the world next year: state 1 and 2. There are two assets that are traded in the market: asset A and B. Information about the payoffs and prices of these assets is presented in the following table. Asset State 1 Payoff State 2 Payoff Current Price Asset A 1.80 0.70 1.40 Asset B 1.20 2.30 1.60 The two states of the world are equally likely. For now, assume that both assets are traded without any restrictions. (a) What are the state prices for State 1 and State 2?

Newstar Co. expects to pay 500,000 euro in one year. Assume the annual interest rate of borrowing or lending euro is 1% and the annual interest rate of borrowing or lending U.S. dollar is 2%. The spot rate of euro is $1.12 per euro.  How much guaranteed amount of U.S. dollar does the company expect to pay after hedging the euro payable transaction in the international money market? (pick the closest answer)     A. 565,545 USD.   B. 554,510 USD.   C. 562,786 USD.   D. 576,912 USD.