Solution-Determining the foreign exhange risk

Determining the foreign exhange risk

Assignment Help Finance Basics

Reference no: EM131412291

10 million USD, 5 year @ 1-year Libor + 200 bps. 1 year Libor is 0.75%.

So if US Fed is intensifying intensify its raising of short term interest rates, does it mean the new interest rate is 0.75% + 2% = 2.75%.

Therefore amount of interest per year is 10 mil USD x 2.75% ? and the risk im exposed to is foreign exhange risk?

Reference no: EM131412291

Questions Cloud

The year of encryption : Formulate a possible solution that utilizes symmetric or asymmetric cryptography, and describe the advantages and disadvantages of the selected solution.

Write a comment about the malnutrition : You find malnutrition a very frustrating topic. In countries rich with food supplies people suffer from malnutrition due to financial, educational or personal choice deficits. In countries with poor food supplies there seems to be the same issue..

Viability criterion of group effectiveness refers to groups : Herzberg recommends building motivators into job content by using __________. The team viability criterion of group effectiveness refers to groups with members who believe that their participation and experiences are positive and meet important perso..

What is the molar constant volume heat capacity at ten k : Chem 4310- What is the molar constant volume heat capacity at 10 K? 100 K? 1000 K? How do your calculated values compare to experiment? Cite your source and justify any differences.

Determining the foreign exhange risk : So if US Fed is intensifying intensify its raising of short term interest rates, does it mean the new interest rate is 0.75% + 2% = 2.75%. Therefore amount of interest per year is 10 mil USD x 2.75% ? and the risk im exposed to is foreign exhange r..

How should leader handle success : Ideally, how should a leader handle success? What does he/she need to do? What does he/she need to avoid? Ideally, how should a leader handle failure? What does he/she need to do? What does he/she need to avoid? Describe the events that will occur wh..

Investment strategy based on funds : To develop an investment strategy specifically for yourself, and as realistic as possible, and reflecting your view of macro-economics and its impact on financial markets.

Advantages of international diversification : Determine why, given the advantages of international diversification, some firms choose not to expand internationally. Provide specific examples to support your response.

What is the most you would pay for this bond : You have an interest in a typical US corporate bond that pays a 5% coupon rate and has exactly 7 years until maturity. Your opportunity cost of invested funds is 9.0%. What is the most you would pay for this bond?

User Account

All Pages

Determining the foreign exhange risk

Reference no: EM131412291

Reference no: EM131412291

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT