Money market hedging with bid-ask spreadsyou us firm have, Ask an Expert

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Money Market Hedging with Bid-Ask Spreads

You (US firm) have accounts receivables (ARs) of SF 1,000,000 in 90 days.

Given S_tof $0.6500 – $0.6530 / SF

Swiss interest rate of 6% - 6.4% p.a. (find for 90 days) and

US interest rate of 8.4% - 8.8% p.a. (find for 90 days).

What are your receivables in dollars if you hedge using money market hedging?

Instead of ARs, if the firm had accounts payables (APs) in Swiss Francs, what are your payables in dollars if you hedge using money market hedging?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92315277

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