User Account

All Pages

Why forward hedging is better than futures hedging

Assignment Help Finance Basics
Reference no: EM133072355

Information about Firm XYZ:

1. The firm imports high quality wool to France from foreign suppliers located in Australia and the New Zealand.

2. The firm exports leather goods to USA from France.3. The firm exports designer clothes from France to Australia, New Zealand and Singapore.

4. The firm has a payment of 8,000,000 AUD due in 3 months to their supplier in Australia, a payment of 6,000,000 NZD due in 2 months to their supplier in New Zealand.

5. The firm is due to receive 8,000,000 AUD from their customer in Australia in 2 months, 4,000,000NZD from their customer in New Zealand in 2 months, 700,000 SGD from their customer in Singapore in 1 months, and 5,000,000 USD from their customer in USA in 2 months

6. The firm is concerned with the impacts of the potential high inflation rate due to the recent expansionary monetary policy globally in their exporting and importing business

I have chose Forward hedging as my hedging strategy, please explain why forward hedging is better than futures hedging in this case.

Reference no: EM133072355

Questions Cloud

Value of a one-year call option : Consider two investors who agree on the stock's price and volatility but who do not agree on the stock's expected return. One believes that the stock price will
Compute the total direct labor variance for the month : Direct labor costs for the month totaled $37,440 based on 3,900 direct labor hours worked. Compute the total direct labor variance for the month
Two-steps binomial tree model : Stock price is currently $48. Over each of the next two three-month periods it is expected to go up by 6% or down by 5%. The risk-free interest rate is 3% per a
Define the systems development life cycle : Define the role of the Systems Analysts versus the Business Analyst. Define the Systems Development Life Cycle. What is a Systems Perspective?
Why forward hedging is better than futures hedging : 1. The firm imports high quality wool to France from foreign suppliers located in Australia and the New Zealand.
Successful branding strategy : In the realm of marketing, a successful branding strategy is one of the most important contributors to organizational success.
What dividend policies from the background readings : Review the 1) dividends for the past three years and 2) capital structure of the company you have been researching for your SLP assignment.
Determine the amount of factory overhead : During the month of February 2021, actual direct labor hours of 8,300 were incurred. Use this information to determine the amount of factory overhead
Forecast mikes additional funds needed : Mike's Bike shop, Inc. sales are expected to increase by 15% from $9 million in 2019 to $10.35 million in 2020. Its assets are $6 million at the end of 2019. Mi

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd