Uses a forward contract to hedge its payables

Assignment Help Basic Statistics

Reference no: EM131042778

California Co. will need 1 million Polish zloty in 2 years to purchase imports. Assume interest rate parity holds. Assume that the spot rate of the Polish zloty is $.30. The 2-year annualized interest rate in the United States is 5 percent, and the 2-year annualized interest rate in Poland is 11 percent. If California Co. uses a forward contract to hedge its payables, how many dollars will it need in 2 years?

Reference no: EM131042778

Questions Cloud

Toyota production system : The Just-In-Time and Lean Systems approaches have been well-established in many companies since the early days of the Toyota Production System.

Various types of information systems : In the current e-world any organization's massive operations are managed by various types of information systems that help them to achieve their goals of servicing their clients.

Identify whether each status is ascribed or achieved : Describe three different statuses that you occupy in society. Identify whether each status is ascribed or achieved. Explain what the role expectations are for each status.

What is the present worth of the cost of tuition : Draw the cash flow diagram and what is the present worth of the cost of tuition, assuming an interest rate of 8% per year?

Uses a forward contract to hedge its payables : California Co. will need 1 million Polish zloty in 2 years to purchase imports. Assume interest rate parity holds. Assume that the spot rate of the Polish zloty is $.30.

Why does iran not trust the united states : From this film whose interest do you think the World Bank and the IMF represent?

Identify the importance of causes to organisation concerned : Causes Identify the importance of the Causes to the organisation concerned. What Caused these Issues to arise? The reasons underlying the Issues will be explicit in the Causes identified

Affects the monthly exchange rate movements : New Hampshire Co. expects that monthly capital flows between the United States and Japan will be the major factor that affects the monthly exchange rate movements of the Japanese yen in the future, as money will flow to whichever country has the h..

To what extent is it inaccurate : To what extent is it accurate to say that the authors of the Constitution feared the establishment of a strong federal government? To what extent is it inaccurate?

User Account

All Pages