Very Advisors, an international pension fund manager, plans to sell equities denominated in Malysian Ringitt...
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Very Advisors, an international pension fund manager, plans to sell equities denominated in Malysian Ringitt (RM) and purchase and equivalent amount of equities denominated in Canadian Dollars (Can). Very will realize net proceeds of 30 million RM at the end of 90 days and wants to eliminate the risk that the Cans will appreciate relative to the RM during this 90-day period. Below is the relevant exchange rate information RM/USD CanS/USD Maturity Bid Ask Bid Ask 6.2681 6.2789 1.5282 1.5343 Spot 30-day 90-day 6.2641 1.5226 1.5285 6.2538 6.2104 6.2200 1.5058 1.5115 a. Describe, in one short sentence, the currency transaction that Very should undertake to eliminate the currency risk over the 90-day period. b. Calculate the RM/Can$ cross-currency rate Very should use in valuing the Malaysian equity portfolio. C. Calculate the currency Value of Very's Malaysian equity portfolio in Can$ d. Find the relevant RM/Cans spot rate
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