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Assume the following information180 day US interest rate = 8%180 day British interest rate = 9%180 day forward rate of British pound = 1.50Spot rate of British pound = 1.48Assume that Riverside Corp. from the United Stateswill receive 400,000 pounds in 180 days. Would it be better offusing forward hedge or a money market hedge? Substantiate youranswer with estimated revenue for each type of hedge and show allwork.
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