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Decides to hedge

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Miami Corp., a multinational company based in the United States, will need 150,000 Swiss francs a year from now to cover its accounts payable. You will be able to obtain a forward contract to buy one-year Swiss francs. The forward exchange rate is $1.09, the same as the Swiss franc futures contract. Additionally, the spot exchange rate is 1.11 dollars and a year ago the exchange rate was 1.08 dollars. If Miami Corp. buys Swiss francs for one year, what will its cost be in dollars one year from now if it decides to hedge?

Reference no: EM133272672

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