Forward hedging, International Economics

Assignment Help:
Assume that Deborah Electronics expects a delivery of Fujitsu laptops in a month from a Japanese supplier. Each laptop sells at $1000 in a retail market whereas the import cost is 90000 yen per unit. The spot exchange rate today is 95.238 yen per us dollar, but in 30 days the dollar is expected to depreciate to 86.956 yen. Deborah Electronics can either wait for a month or enter a 30 days forward exchange deal with bank of america to buy yen forward at 92.308 yen per dollar. Calculate profit per laptop under each scenario and suggest Deborah Electronics the better option.

Related Discussions:- Forward hedging

Economic problems, The Republic of Ireland has had colossal economic proble...

The Republic of Ireland has had colossal economic problems for many years. On the other hand, in the last two decade, the nation has experienced a thriving economy and has becom

Explain the concepts of trade creation, When asked by the Carnegie Commissi...

When asked by the Carnegie Commission to prepare a report on post war Preferential Trading Agreements, Viner (1950) pointed out that they are not free trade. He used the concepts o

Calculus, Application of defferential calculus in economics

Application of defferential calculus in economics

Modern theory of trade, #question.explain me Hecksher OHLIN theory of inter...

#question.explain me Hecksher OHLIN theory of international trade in simple english

Opportunity cost, Using examples, from the government, illustrate the signi...

Using examples, from the government, illustrate the significant opportunity cost.

Compare currency board to conventional fixed exchange rate, Q. Compar...

Q. Compare currency board to conventional fixed exchange rate? Answer: Currency board mayn't acquire domestic assets and therefore cannot lend currency freely to domesti

#foreign trade, What is the role of foreign trade in an economic developmen...

What is the role of foreign trade in an economic development of a country

Write Your Message!

Captcha
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!

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