What will be the approximate value of the exports in 1 year


Assume the following information:

US deposit rate for one year: 11%

US borrowing rate for one year: 12%

Swiss deposit rate for one year: 8%

Swiss forward rate for one year: $.40

Swiss franc spot rate: $.39

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

Using the information above, what will be the approximate value of the exports in 1 year in US dollars given that the firm executes a forward hedge?

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Financial Management: What will be the approximate value of the exports in 1 year
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