On june 1st 2018 swatch expects to ship 10 million watches, Ask an Expert

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On June 1st, 2018, SWATCH expects to ship 10 million watches from its Swiss plant to the US that it will sell through dealers on 240-day terms at $55 each. Therefore SWATCH will receive payment from these outlets on January 26th, 2019. Assuming that SWATCH needs to cover its expenses in Switzerland and thus wants to hedge its SF/US$ exposure using a forward contract with a Swiss bank, what is the minimum amount of Swiss Francs they should receive on January 26th, 2019 given the 8-month forward rate, $1.0883/SF for one US $ in terms of SF? What are two other ways SWATCH might hedge its SF/US$ exposure?

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Financial Management, Finance

Category:- Financial Management
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