One way to hedge its currency risk

Assignment Help Financial Management
Reference no: EM132062771

A mexican firm signed a contract to purchase a cargo ship from a U.S. based multinational corporation with the contract stipulating the settlement currency in mexican dollar 6 months from now. One way to hedge its currency risk for the U.S. firm is to sell mexican dollars forward.

True or False and explain why.

Reference no: EM132062771

Questions Cloud

Calculate the after tax salvage value : Assume the firm has a 30% marginal tax rate and the equipment will be used in a project that last 5 years. Calculate the after tax salvage value.
What is your incremental cash flow from selling the machine : You purchased a machine Forall $1.12 million three yers ago and have been applying straight line depreciation to zero Forall a seven year life your tax rate.
What is the value of the firm equity and debt : What is the value of the firm’s equity and debt if Project A is undertaken?
Find what price do you need if you expect to sell the share : You have just purchased a share of stock for $19.73. The company is expected to pay a dividend of $0.56 per share in exactly one year.
One way to hedge its currency risk : One way to hedge its currency risk for the U.S. firm is to sell mexican dollars forward.
What was the annual rate of return on given bond : You purchased a newly issued 25-year $1000 par value bond with a 7% annual coupon rate, and a YTM = 6.20%. You sell the bond 5 years later when the YTM.
How diversification is based on correlation : how diversification is based on correlation, why do you think people fail to diversify in the ways you have mentioned?
Find the price of the option half-way to maturity : Find the price of the option half-way to maturity if the share price at that time is 17.
Find the balance owed after the tenth payment : Find the balance owed after the tenth payment had been made.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd