Using the information above what will be the approximate


Assume the following information:

U.S deposit rate for 1 year = 11%

U.S. borrowing rate for 1 year = 12%

Swiss deposit rate for 1 year = 8%

Swiss borrowing rate for 1 year = 10%

Swiss forward rate for 1 year = $.40

Swiss franc spot rate = $.39

Also assume that a U.S. exporter denominates its Swiss exports I Swiss francs and expects to receive SF600, 000 in 1 year.

Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge? What will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge?

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Business Economics: Using the information above what will be the approximate
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