Money market hedge, Describe the steps to take for a money

Money market hedge

Reference no: EM13116579

Assume that Hester Company has net payables of 500,000 Mexican pesos that are due in 180 days. The interest rate in Mexico is 8 percent over 180 days, and the U.S. interest rate is 4 percent over 180 days. The spot rate of the Mexican peso is $0.10.

Describe the steps to take for a money market hedge. You need to show clearly the amounts that are related to the actions to take.

Reference no: EM13116579

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