Money market hedge on payables

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Assume that Vermont Co. has net payables of 200,000 Mexican pesos in 180 days. The Mexican interest rate is 7% over 180 days, and the spot rate of the Mexican peso is $.10. Suggest how the U.S. firm could implement a money market hedge. Be precise.

Reference no: EM1359574

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Money market hedge on payables : Suppose that Vermont Corporation has net payables of 200,000 Mexican pesos in 180 days. The Mexican interest rate is seven percent over 180 days, and the spot rate of the Mexican peso is $.10.

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