hedge to hedge 200,000 pounds of payables due in 180 days. Assume the firm has no excess cash. Assume the spot rate of the pound is $2.02, the 180-day forward rate is $2.00. The British interest rate is 5%, and the U.S. interest rate is 4% over the 180-day period.
Dollars are the currency of many countries around the world, here is just one example. 550,750 British pounds = 880,385.69 Canadian dollars as of 27th Dec 2011
Convert 180.45 US Dollars to Pound Sterlings. 180.45 United States Dollar in British Pound Sterling with today exchange rate. Online currency converter help with conversion from United States money in United Kingdom local currency. Use Free USD:GBP calculator and other tools on this page
conversion of dollars to British pounds. Assume that interest rate parity holds and that Rollins believes the 180-day forward rate is a reliable predictor of the spot rate to be realized 180 days from now. Would the British investment provide an effective yield that is below, above, or equal to the yield on the U.S. investment? Explain your answer.