Determine the amount of us dollars needed in 1 year if a


Montclair Co., a U.S. firm, plans to use a forward hedge to hedge its payment of 3 million Australian dollars for Australian goods in one year. The U.S. interest rate is 7 percent, while the Australian rate is 12 percent. The spot rate of the Australian dollar is $.85, while the 1-year forward rate is $.81. Determine the amount of U.S dollars needed in 1 year if a forward hedge is used.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Determine the amount of us dollars needed in 1 year if a
Reference No:- TGS0595209

Expected delivery within 24 Hours