q show maximum opportunity costif marton hedges


Q. Show Maximum opportunity cost?

If Marton hedges all its awaited dollar income over the next year at US$1.55: £l this will make guaranteed (ignoring other sources of risk) sterling income of $7.25m/1.55 = £4.68m. If the tangible rate of exchange moved to US$l.3: £1 it would have made sterling earnings of £5.58m. This point outs an opportunity cost of hedging of £0.90m.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: q show maximum opportunity costif marton hedges
Reference No:- TGS0323520

Expected delivery within 24 Hours