Swiss franc 1-year forwardrate$1.17!!Swiss franc spot rate now$1.09%3DAlso assume that a U.S. exporter denominates its Swiss exports in Swiss francs andexpects to receive SF500,000 in 1 year.Using the information above, what will be the approximate value of these exports in1 year in U.S. dollars given that the firm executes a forward hedge?O$545,000O$438,596$585,000O $570,000 Microsoft purchased a call option on pounds for a premium of $.05 per pound withan exercise price of $1.25; the option will not be exercised until the expiration date,if at all. If the spot rate on the expiration date is $1.39, Microsoft's net profit perpound is (ignoring time value of money):$0.02None of theseO-$0.01$0.09$0.14

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Swiss franc 1-year forward $1.17 !! rate Swiss franc spot rate now = % $1.09 Also assume that a U.S. exporter denominates its Swiss exports in Swiss francs and expects to receive SF500,000 in 1 year. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge? $545,000 $438,596 O$585,000 $570,000

Swiss franc 1-year forward $1.17 !! rate Swiss franc spot rate now = % $1.09 Also assume that a U.S. exporter denominates its Swiss exports in Swiss francs and expects to receive SF500,000 in 1 year. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge? $545,000 $438,596 O$585,000 $570,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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