Determine the best currency option

Assignment Help Finance Basics

Reference no: EM13283674

Exxon, whose global sales are generally dollar denominated, finds it has excess cash of $10,500,000,000, which it can invest for up to three years. It has determined that its best options are either a three-year Euro-dollar ($) deposit paying 2.75% or a three-year Swiss Franc denominated deposit paying 1.65% since it expects the SF to appreciate 1.1% per annum against the dollar over the next three years. Using cash flow analysis determine the best currency option in which Exxon should invest. Be sure to show your complete calculations of the annual return on each investment at the end of the three-year term. Assume that the annual interest amount is reinvested, i.e. compounds, at the same annual interest rate. Would your answer change if Exxon revised its outlook for the SF to appreciate 1.2% per year? Show all calculations!!!

Reference no: EM13283674

Questions Cloud

What is the minimum amount of won they should receive : what is the minimum amount of Won they should receive on September 28th, 2013 given the nine month forward rate for one US dollar in terms of Won that you calculated in problem one? What are two other ways Samsung might hedge their Won/US$ exposur..

Reflecting on general education : Reflecting on General Education

Analyze the leadership style of a senior executive : Analyze the leadership style(s) of a senior executive (CEO, CFO, COO, Director, etc.) in your current or previous organization who made a positive or negative impact on you.

Find the magnitude of totalflux through five non-shaded face : There is a uniform electric field throughout the region given by E = 4.9i + 7.1j + 3.6k in N/C units, What is the magnitude of the total flux through the five non-shaded faces

Determine the best currency option : Using cash flow analysis determine the best currency option in which Exxon should invest. Be sure to show your complete calculations of the annual return on each investment at the end of the three-year term.

Explain what is the volume of a unit cell of the metal : As a solid, Fe adopts a body-centered cubic unit cell. How many unit cells are present per cubic centimeter of Fe. What is the volume of a unit cell of this metal

Evaluate the research in the hiflyer airline case study : Evaluate the research in the HiFlyer Airline Case Study. What are the pros and cons of doing the research? Support your claims with examples from required material(s) and/or other scholarly resources, and properly cite any references. Respond to at ..

Jane is the assistant principal at a local elementary school : Jane is the Assistant Principal at a local elementary school. With dozens of faculty and staff members, she finds that updating them on the newest policies and procedures can be time consuming. Further, it seems that many policies and procedure..

Find the magnitude and direction of his third displacement : A man in a maze makes three consecutive displacements. His first displacement is 6.40 m westward, Find the magnitude and direction of his third displacement

User Account

All Pages