What value can alcoa lock in for receivable of euro

Assignment Help Financial Management

Reference no: EM132028840

Assume Alcoa has access to the following quotes:

U.S. borrowing rate for 1 year = 9.5%

U.S. deposit rate for 1 year = 8.7%

French borrowing rate for 1 year = 11.3%

French deposit rate for 1 year = 10.2%

euro spot quote = $1.2363?78

euro 1 year forward quote = $1.2329?47

What value can Alcoa lock in for a receivable of euro3 million due in one year if it executes a money market hedge today?

Reference no: EM132028840

Questions Cloud

The market allocates capital to firms : The market allocates capital to firms based on all of the following except:

Determine irr for this project : If the required return is 8 percent, what is the NPV for this project? Determine the IRR for this project.

What is the proper cash flow amount : What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

What is the dollar cost of the gas purchases for dupont : Within the neutral zone, how much does Du Pont owe British Gas in pounds? What is the dollar cost of the gas purchases for DuPont?

What value can alcoa lock in for receivable of euro : What value can Alcoa lock in for a receivable of euro3 million due in one year if it executes a money market hedge today?

Preemptive right to purchase stocks important to shareholder : Why is the “preemptive right” to purchase stocks important to shareholders?

Calculate the real apr with an early payoff after ten years : Calculate the reportable APR. Calculate the real APR and Calculate the real APR with an early payoff after 10 years.

Firm would increase its investment in net working capital : A firm would increase its investment in net working capital in order to produce ________.

An investor purchases the instrument : An investor purchases the instrument for P, and has calculated that the total value of the investment (i.e. P plus interest earned) will be $2,000 at maturity.

User Account

All Pages