The forward rate of the Swiss franc (SF) is $0.50. The spot rate of the Swiss franc is $0.48. The following interest rates exist:
U.S. 
Switzerland 

360day borrowing rate 
7% 
5% 
360day deposit rate 
6% 
4% 
Kriner Inc. needs to purchase SF200,000 in 360 days. Determine the amount of U.S. dollars needed in 360 days if Kriner Inc. uses a money market hedge.
Group of answer choices
$96,914
$101,904
$101,923
$92,307
$98,770
Amount to pay in SF in 360 days = SF200,000
Amount of SF to deposit today = Amount to pay in SF in 360 days / (1 + SF deposit rate)
Amount of SF to deposit today = SF200,000 / (1 + 4%) = SF192,308
$ required to purchase SF192,308 today = SF192,308 * spot rate
$ required to purchase SF192,308 today = SF192,308 * $0.48 = $92,308
$92,308 is borrowed today, and repaid after 1 year.
$ to repay after 1 year = $92,308 * (1 + $ borrowing rate)
$ to repay after 1 year = $92,308 * (1 + 7%)
$ to repay after 1 year = $98,770
The answer is $98,770
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