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US Inc. is an American company. It has net receivables of Swiss Franc (CHF) 100,000...

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Finance

US Inc. is an American company. It has net receivables of Swiss Franc (CHF) 100,000 in 90 days. The spot rate of CHF is 0.50 USD and the Swiss interest rate is 2% over 90 days (Note: NOT 2% per year). Meanwhile interest rate for USD is 1.5% over 90 days (Note: NOT 1.5% per year). Explain how US Inc. can implement a money market hedge. What is the value of this receivables in USD?

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