(Transaction Exposure)Trident - A U.S.-based company, has concluded a sale of telecommunications equipment to Regency...
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Finance
Transaction ExposureTrident A USbased company, has concluded a sale of telecommunications equipment to Regency UK A total payment of is due in days. Given the following exchange rates and interest rates, the guaranteed dollar receipt from forward hedge is $ in days. No decimal numbers
Assumptions
day in pounds
Spot rate, US$ per pound
day forward rate, US$ per pound $
month US dollar investment rate
month US dollar borrowing rate
month UK investment interest rate
month UK borrowing interest rate
Put options on the British pound: Strike rates,
US$pound $
Strike rate
Put option premium
Strike rate
Put option premium
Strike rate $
Call option premium
Trident's WACC
Maria Gonzalez's expected spot rate in days, US$ per pound $
Value
table
Answer & Explanation
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