What about hedging financial management

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Describe the major objectives of fiKatie wants to sell her firm immediately (in USD), with no risk. She has one offer of JPY 100 Billion from a Japanese consortium, and another for GBP 700MM from a London group. Both offers will pay half immediately, and half in one year.

Current bid-ask spot rates are 90-91 JPY/USD, and 1.5-1.6 USD/GBP.

The U.S. interest rates for lending and borrowing are 9%-10%. The JPY rates are 1%-2%, and the GBP rates are 19%-20%.

Evaluate the offers. Which offer should Katie accept? Why? What about hedging financial management. Support your review with evidence and examples.

Reference no: EM133227639

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