Suppose that a U.S-based company exported goods to a Swiss client a choice of paying...
90.2K
Verified Solution
Link Copied!
Question
Finance
Suppose that a U.S-based company exported goods to a Swiss client a choice of paying either $50,000 or SF 75,000 in three months. The spot exchange rate is $0.63/SF and the three-month forward rate is $0.65/SF. You are the CFO of the U.S company. If you believe that the spot rate in three months is the same as the current forward rate, which currency do you think the Swiss client will choose to use for payment, and what is the expected value of this free option for the Swiss clients?
a)US dollars; 1,250 dollars
b) US dollars; 2,750 dollars
c) Swiss francs; 1,923 SF
d) Swiss francs; 4,365 SF
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.