International Finance

Please show all work1. Super Hero Corporation based in the US sold a fleet of their latest Hover Flying Suits to the Ministry of Defense in London on credit for £45,000,000 payable in 9 months.Nine-month forward exchange rate: F9 = $ 1.6933 / £Fx Advisor estimated spot rate in nine months: ST = $ 1.4585 / £(a) What is the expected gain/loss from forward hedging?(b) If you were the financial manager of Super Hero, Inc., would you recommend hedging this pound receivable? Why or why not?(c) Suppose the foreign exchange advisor predicts that the future spot rate will be the same as the forward exchange rate quoted today. Would you recommend hedging in this case? Why or why not?(d) Suppose now that the advisor forecasts the future spot exchange rate to be $ 1.7276 / £. Would you recommend hedging? Why or why not?2. You plan to visit Germany in six months to negotiate a retail contract with a company located in Munich. You expect to incur a total cost of € 10,800 for lodging, meals and transportation.Current spot exchange rate: $0.70 / €Six-month forward rate: $0.78 / €Six-month call option on euros has exercise rate: $0.82 / €Premium on six-month call option: $0.03 / €Expected future spot exchange rate: same as the forward rateSix-month interest rate in U.S.: 3.5% per annumSix-month interest rate in Germany: 1.5% per annuma) Calculate your expected dollar cost of buying €10,800 if you hedge via a call option on euros.i. First calculate the FV of the call premiumii. Next, at the expected future spot rate would you exercise the option?iii. To find your expected dollar cost: If you would not exercise, then total expected dollar cost is the FV of the premium plus the cost exchanged at the future spot rate. If you would exercise the option, then the total expected dollar cost would equal the FV of the premium plus the cost exchanged at the option exercise price.(b) Calculate the future dollar cost of meeting this euro obligation if you hedge using a forward contract.(c) At what future spot exchange rate will you be indifferent between the forward and option market hedges?(d) Illustrate the future dollar costs of meeting the euro payable against the future spot exchange rate under both the options and forward market hedges. Graph “$ Cost” on the Y-axis and “$ / €” on X-axis.

Struggling to find relevant content or pressed for time? – Don’t worry, we have a team of professionals to help you on
International Finance
Get a 15% Discount on this Paper
Order Now
Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
Sign up, place your order, and leave the rest to our professional paper writers in less than 2 minutes.
step 1
Upload assignment instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
s
Get personalized services with MyCoursebay
One writer for all your papers
You can select one writer for all your papers. This option enhances the consistency in the quality of your assignments. Select your preferred writer from the list of writers who have handledf your previous assignments
Same paper from different writers
Are you ordering the same assignment for a friend? You can get the same paper from different writers. The goal is to produce 100% unique and original papers
Copy of sources used
Our homework writers will provide you with copies of sources used on your request. Just add the option when plaing your order
What our partners say about us
We appreciate every review and are always looking for ways to grow. See what other students think about our do my paper service.
Human Resources Management (HRM)
Excellent Thank you.
Customer 452813, January 11th, 2025
Nursing
Thank you MyCoursebay team for your support. With your help I got an A for my past courses
Customer 452635, May 7th, 2022
Other
GOOD
Customer 452813, July 5th, 2022
Criminal Justice
Thank you for the great paper. I like how the writer structured it.
Customer 452627, October 2nd, 2021
Business and administrative studies
Perfect as always!
Customer 452909, April 15th, 2023
Other
Great
Customer 452813, January 21st, 2024
Nursing
Great Work!
Customer 452453, April 26th, 2023
Other
GOOD
Customer 452813, July 5th, 2022
Nursing
Thank you to the writer and also thank you to the support team I got an A for the paper
Customer 452635, June 17th, 2022
Other
GOOD
Customer 452813, July 5th, 2022
Social Work and Human Services
Excellent! Done earlier than needed and with more sources than needed! Great work!
Customer 452485, August 22nd, 2021
IT, Web
Don did an excellent job!!!
Customer 452885, January 25th, 2023
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Good News ! We now help with PROCTORED EXAM. Chat with a support agent for more information