Study Guides (250,978)
AUS (3,662)
QUT (275)
EFB312 (0)
All (0)

Final- Practice Exam without Solutions .doc

5 Pages

Economics and Finance
Course Code

This preview shows pages 1 and half of page 2. Sign up to view the full 5 pages of the document.
1QUESTION 1aShould a company hedge its foreign exchange exposure Explain reasons for and against hedging 4 MARKSbGold Coast Hotel Company has both revenues and costs set in Australian dollars but still finds that its profits fluctuate with the value of the Australian dollar It thinks that this has something to do with its high number of international guests Does the company have an exposure to will be hurt by an appreciation or depreciation of the Australian dollar relative to other currencies What could the company do to offset this exposure3 MARKSQUESTION 2DKNY owes Ptas 70 million in 30 days for a recent shipment of Spanish textiles It faces the following interest and exchange ratesSpot ratePtas 130Forward rate 30 daysPtas 13130day put option on dollars at Ptas 1291 premium30day call option on dollars at Ptas 1313 premiumUS dollar 30day interest rate annualized75Peseta 30day interest rate annualized15a What is the hedged cost of DKNYs payable using a forward market hedge2 MARKS
More Less
Unlock Document
Subscribers Only

Only pages 1 and half of page 2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
Subscribers Only
You're Reading a Preview

Unlock to view full version

Unlock Document
Subscribers Only

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.