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On. January 3d, 2007, Daimler-Chrysler expects to ship 10,000 cars from its Hyundai affiliated plant in Korea to the US, which it will sell through its US dealers on 240-day terms at $10,000 each. So DaimlerChrysler will receive payment from its dealers on August 30, 2007. Assuming that Daimler-Chrysler group needs to cover its expenses in Korea and thus wants to hedge its won exposure using a forward contract with a US bank in Korea, what is the minimum amount of won they should receive on August 30th, 2007 given the eight month forward rate for one US dollar in terms of won that you find outd in problem one? What is one other way they might they hedge their won/dollar exposure?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M959407

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