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

#titleADAM SMITH''S TRADE THEORY OF ABSOLUTE ADVANTAGE, Critical evaluation...

Critical evaluation of Adam Smith''s Theory. Outline of its purest form. What is its critism?

What are predictions for the long run of monetary approach, What are the pr...

What are the predictions for the long run of the Monetary Approach? Answer:     Money supplies- Known the equations

Explains the sharply divergent long-run growth patterns, Q. What ex...

Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have

The law of reciprocal demand, what does the law of reciprocal states about ...

what does the law of reciprocal states about and how does it differ from the theories of smith and ricardo

Opportunity cost thoery, what are the criticisms of OPPORTUNITY COST THEORY...

what are the criticisms of OPPORTUNITY COST THEORY of international trade propounded by PROF.HABERLER and OHLIN

Explain the specific objectives of fiscal incentives, Question: (a) ...

Question: (a) Illustrate the differences between inter and intra industry trade. (b) Foreign Investors generally tend to adopt a two-stage process when evaluating count

Explain the law of diminishing marginal utility, Question 1 What are the m...

Question 1 What are the main areas of microeconomics that business managers must be familiar with in performing their managerial functions effectively and efficiently? Questio

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