Determine the outcome from hedge if it was closed on august

Assignment Help Risk Management

Reference no: EM13925974

On June 17 of a particular year, an American watch dealer decided to import 100,000 Swiss watches. Each watch costs SF225. The dealer would like to hedge against a change in the dollar/Swiss franc exchange rate. The forward rate was $0.3881. Determine the outcome from the hedge if it was closed on August 16, when the spot rate was $0.4434.

Reference no: EM13925974

Questions Cloud

How to determine whether to buy or sell futures when hedging : Explain how to determine whether to buy or sell futures when hedging. For each of the following situations, determine whether a long or short hedge is appropriate. Justify your answers.

Algebraic formulation of the linear programming model : A complete algebraic formulation of the linear programming model. This should include a description of the decision variables and an explanation of the objective function and constraints.

Goals and perspectives of psychology paper : There are eight current perspectives in psychology; psychoanalytic, behavioral, humanistic, cognitive, evolutionary, biological, sociocultural, and psychosocially. All eight of these have really fascinated me in one way or another but there are th..

Estimate the marginal effect of another year of education : Construct a histogram of ln(WAGE). Compare the shape of this histogram to that for WAGE from part (a). Which appears to be more symmetric and bell-shaped?

Determine the outcome from hedge if it was closed on august : The forward rate was $0.3881. Determine the outcome from the hedge if it was closed on August 16, when the spot rate was $0.4434.

Every person possesses a gender identity : Every person possesses a gender identity within their self's which nearly everyone match one's anatomic look. A person's gender indentify is either male or female or possibly something in between. This is a significant individual trait that adds..

Disadvantages of market-based indicators : what advantages or disadvantages of market-based indicators for making investment

Chief aim of sampling : The chief aim of sampling is to be able to select a. simple random samples b. a sample whose statistics will accurately portray an unknown population parameter

Endures indistinguishable thoughts, hallucinations, lessen : Schizophrenia is depicted as a mental disease, in which a person endures indistinguishable thoughts, hallucinations, and lessened skills to feel ordinary emotions. Schizophrenia is classified as a disease in which a person's ability are to process..

User Account

All Pages