Which hedge is optimal for dow

Assignment Help Financial Management

Reference no: EM131902555

Dow Chemical is to deliver chemicals to an Indian firm in one year and is supposed to receive 40 million rupee (INR) at the time of delivery. The current exchange rate is 34.5 rupee per dollar (INR/$) and the one year-forward rate is 40 rupee per dollar (INR/$). Dow’s one-year interest rates are 18% for rupee funds and 4% for dollar funds.

Suppose that Dow decides to hedge its exposure to the rupee. What are the alternatives available to Dow based on the information given? Which hedge is optimal for Dow?

Reference no: EM131902555

Questions Cloud

Write a summary of the case in brief : Elaborate on two key learnings from the case related to training and development and its integration with the organization.

Assuming that the partial goodwill method is used : how much goodwill was reported on the January 1, 20X1 consolidated balance sheet assuming that the "partial goodwill" method is used?

List entity name and attribute names for each entity : DBST 651 Midterm Questions - Identify entities and attributes. List entity name and attribute names for each entity

How validity and reliability can increase performance : Peruse issues associated with maintaining validity and reliability in healthcare organizations, and explain how validity and reliability.

Which hedge is optimal for dow : What are the alternatives available to Dow based on the information given? Which hedge is optimal for Dow?

What about performance concerns : If JavaScript CSS injection is used more often than CSS files on a web page, does that make the page more complicated and difficult to maintain?

What were the most compelling topics : Critique 3 ideas, concepts, or topics from this course, and reflect on how they relate to the course objectives and your career aspirations.

Persuasive research speech assignment : Speech must be 5 minutes long and on a topic that is meaningful and significant. If the topic you select is significant but in a remote way, be sure to formulat

Beaver approached the prediction of bankruptcy of bonds : Talk on how William Beaver approached the prediction of bankruptcy of bonds.

User Account

All Pages