Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Do you really want to delete this prezi?
Neither you, nor the coeditors you shared it with will be able to recover it again.
Make your likes visible on Facebook?
Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.
Airbus mini case
Transcript of Airbus mini case
at spot rate At current spot: €28,571,428.57 A400 If euro rises above €1.05,
Airbus will receive less than €28,571,428.57
If euro falls below €1.05,
Airbus will receive more than €28,571,428.57 Buy a Forward Contract Forward rate: €1.10 $30,000,000 / 1.10 €27,272,727.27 Money Market Hedge 1. Borrow $29,126,213.59 2. Use $ to buy € at spot €1.05 €27,739,251.04 3. Deposit at 2.5% €28,432,732.32 Option Strike price: $1 = €0.95 Premium: €0.02 per $ Put If we assume that the current forward exchange rate is an unbiased predictor of the future spot exchange rate, then Exercise because $0.95 > $0.9091 Cost of option: €615,000 €27,885,042.75 Indifference 28,432,732.32 = $30,000,000x-615,000 x = €1.0327 Summary Forward Contract: €27,272,727.27
Money Market Hedge: €28,432,732.32
Put Option: €27,885,000