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What is the hedged cost of Kine payable using money market

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Reference no: EM133070243

Question - Kine, fancy footwear manufacturing company has an obligation to pay MXN 14 million in 30 days for a recent shipment from Mexico. The CFO of Kine is contemplating hedging the company's MXN exposure on this transaction. She collects the below information regarding the interest rates and exchange rates, from her forex trader:

Spot Rate: MXN 20.08 / USDForward Rate: MXN 20.28 / USD

30-day Put Option on USD MXN 19.50 / USD: 1% Premium30-day Call Option on USD MXN 20.50/ USD: 3% Premium

USD 30-day interest rate (annualized): 7.5%MXN 30-day interest rate (annualized): 15%

You are required to answer the below questions to assist the CFO:

Required - What is the hedged cost of Kine's payable using money market hedge?

Reference no: EM133070243

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