Assume the MNC has an outstanding payment of $100,000 to your host country and a cash flow of $200,00 for the host country. Using all three hedging strategies to determine the most effective strategy. Show all working. Use each country’s current lending, deposit, spot, and forward rate. To find the forward rate you will need to visit a bank’s website. State the currency of your host country and provide evidence of the rates in your project.
1. Determine the number of dollars the MNC will receive using each strategy
11. Determine the number of dollars needed to pay the payable using each strategy
111. Select the strategy that you prefer based on the information your results