Explain the steps to take for a money market hedge. you, Ask an Expert

Accounting

Suppose that Hester Company has net payables of 500,000 Mexican pesos which are due in 180 days. The interest rate in Mexico is 8 percent over 180 days, and U.S. interest rate is 4 percent over 180 days. The spot rate of the Mexican peso is $0.10.

Explain the steps to take for a money market hedge. You need to describe clearly the amounts which are related to the actions to take.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9220075

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