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Business, 28.06.2019 18:10 milagrosee12

Assume that carbondale co. expects to receive s$500,000 in one year. the existing spot rate of the singapore dollar is $.60. the one year forward rate of the singapore dollar is $.62. carbondale created a a probability distribution for the future spot rate in one year as followsfuture spot rate: 0.61,0.63,0.67probability: 0.2,0.5,0.3assume that one year put options on singapore dollars are available, with an exercise price of $.63 and a premium of four cents per unit. one year call options on singapore dollars or available with an exercise price of $.60 and a premium of three cents per unit. i assume the following money market rates. deposit rate: 8% (us), 5% (s)borrowing rate: 9; 6given this info, determine whether a forward hedge, money market hedge, or a currency options hedge would be most appropriate. then compare the most appropriate hedge two and unhedged strategy and decide whether carbondale should hedge it's receivables position.

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Assume that carbondale co. expects to receive s$500,000 in one year. the existing spot rate of the s...
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