Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 Jordanian Dinar of payables due in 180 days. Assume the spot rate of the Jordanian Dinar is $2.02 and the 180 day forward rate is $2.00. The Jordanian interest rate is 5%, and the U.S. interest rate is 4% over the 180 day period. A)$391,210. B)$396, 190. C)$ 384,762. D)$400, 152 E)none of these.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Use the following information to calculate the dollar
cost of using a money market hedge to hedge 200,000
Jordanian Dinar of payables due in 180 days. Assume
the spot rate of the Jordanian Dinar is $2.02 and the
180 day forward rate is $2.00. The Jordanian interest
rate is 5%, and the U.S. interest rate is 4% over the
180 day period. A)$391,210. B)$396, 190. C)$
384,762. D)$400, 152 E)none of these.
Transcribed Image Text:Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 Jordanian Dinar of payables due in 180 days. Assume the spot rate of the Jordanian Dinar is $2.02 and the 180 day forward rate is $2.00. The Jordanian interest rate is 5%, and the U.S. interest rate is 4% over the 180 day period. A)$391,210. B)$396, 190. C)$ 384,762. D)$400, 152 E)none of these.
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