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What is the hedged value of this receivable

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A US bank is trying to decide how to go about hedging SFr 70m in receivable in 180 days. Suppose it faces the following exchange and interest rates:

Spot rate: $ 0.6433-42/SFr;

Forward rate (180 days): $0.6578-99/SFr

180-day SFr interest rate (annualized): 4.01%-3.97%

180-day USD interest rate (annualized): 8.01%-7.98%

1) What is the hedged value of this receivable using a forward market hedge?

2) What is the hedged value of this receivable using a money market hedge?

3) Which hedge is less expensive?

Reference no: EM132288894

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