Business, 11.03.2020 04:21 Clerry

Your firm is a U. K.-based importer of bicycles. You have placed an order with a Swiss firm for SFr. 1,000,000 worth of bicycles. Payment (in Swiss francs) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity. U. S. $ Equiv. Currency per U. S Contract Size Country Tuesday Monday Tuesday Monday£ 10,000 Britain 1.9400 1.9600 0.5102 0.5155 1 month forward 1.9500 1.9700 0.5076 0.5128 3 months forward 1.9600 1.9800 0.5051 0.5102 6 months forward 1.9700 1.9900 0.5025 0.5076 12 months forward 1.9800 2.0000 0.5000 0.5051€ 10,000 Euro 1.5400 1.5600 0.6410 0.6494 1 month forward 1.5500 1.5700 0.6369 0.6452 3 months forward 1.5600 1.5800 0.6329 0.6410 6 months forward 1.5700 1.5900 0.6289 0.6369 12 months forward 1.5800 1.6000 0.6250 0.6329 SFr.10,000 Swiss franc 0.9000 0.9200 1.0870 1.1111 1 month forward 0.9200 0.9400 1.0638 1.0870 3 months forward 0.9400 0.9600 1.0417 1.0638 6 months forward 0.9600 0.9800 1.0204 1.0417 12 months forward 0.9800 1.0000 1.0000 1.0204

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Your firm is a U. K.-based importer of bicycles. You have placed an order with a Swiss firm for SFr....