Question an australian organization has a yen35000000, Ask an Expert

Finance

Question: An Australian organization has a ¥35,000,000 account payable in 3 months. The current Japanese yen (¥)/Australian Dollar (A$) spot exchange rate is ¥87.35/A$. The organization expects the spot rate in 3 months to be ¥80.45/A$. The 3-month forward exchange rate is ¥84.95/A$. The Australian Dollar (A$) 3-month borrowing rate is 4.00% per annum and the Australian Dollar (A$) 3-month investment rate is 6.00% per annum. The Japanese yen (¥) 3-month borrowing rate is 8.00% per annum and the Japanese yen (¥) 3-month investment rate is 4.00% per annum. The organization's weighted average cost of capital is 9.70% per annum. The organization is considering three hedge positions: remaining unhedged, forward market hedge and money market hedge. Which of these hedge positions should the organization adopt?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92778660

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What is the price of a 1000 par value bond with an 8 coupon

What is the price of a $1,000 par value bond with an 8% coupon rate paid semiannually, if the bond is priced to yield 4% and it has 15 years to maturity?

Looking for how to calculate on excelhomework

Looking for how to calculate on Excel. Homework assignment: Calculating annuity present values. Beginning three months from now, you want to be able to withdraw $2,500 each quarter from your bank account to cover college ...

1 the following data are given for the allright

1. The following data are given for the Allright Corporation: Initial cost of proposed equipment $75,000 Estimated useful life ...

Why might a firm announcing it will borrow more be taken as

Why might a firm announcing it will borrow more be taken as a good news signal?

A corporation has an outstanding bond with the following

A corporation has an outstanding bond with the following characteristics: Coupon rate = 6.0% Interest payments - Semi-annually Face value = $1,000 Years to maturity = 20 Current market value = $1,054.88 Find the yield to ...

The following information relates to ram

The following information relates to RAM Corporation: Accounts receivable $160,000 Total credit sales $2,500,000 Accounts payable ...

Question -1 how did the liability of newness affect justin

Question - 1. How did the "liability of newness" affect Justin Gold as he attempted to formally launch his entrepreneurial venture? 2. What key employees did Gold recruit to be members of his new-venture team? 3. What cr ...

Question - find and read 2 articles about a recent merger

Question - Find and read 2 articles about a recent merger or acquisition. Write a paper of approximately 900 words for each article that answers the following questions: • What alternatives to the merger or acquisition m ...

Are there risks involved in investing in security markets

Are there risks involved in investing in security markets? Can someone explain what is a risk-return tradeoff? Lastly are risks ever mitigated with diversification and time?

Net income is 300 million depreciation is 70 million

Net income is 300 million, depreciation is 70 million, capital expenditures are 120 million, investment in working capital is 30 million, interest expenses (before tax) are 40 million, and outstanding debt is 850 million ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert