California co will need 1 million polish zloty in 2 years


California Co. will need 1 million Polish zloty in 2 years to purchase imports. Assume interest rate parity holds. Assume that the spot rate of the Polish zloty is $.30. The 2-year annualized interest rate in the United States is 5 percent, and the 2-year annualized interest rate in Poland is 11 percent. If California Co. uses a forward contract to hedge its payables, how many dollars will it need in 2 years?

Request for Solution File

Ask an Expert for Answer!!
Basic Statistics: California co will need 1 million polish zloty in 2 years
Reference No:- TGS01388662

Expected delivery within 24 Hours