U.S. Jordan 360-day borrowing rate 5% 6% 3…

  U.S. Jordan 360-day borrowing rate 5% 6% 360-day deposit rate 4% 5% Pablo Corp. will need 150,000 Jordanian dinar (JOD) in 360 days. The current spot rate of the dinar is $1.46, while the 360-day forward rate is $1.48. What is Pablo’s cost from implementing a money market hedge (assume Pablo does not have any excess cash)?

Assume that Mill Corporation, a U.S.-based MNC, has applied…

Assume that Mill Corporation, a U.S.-based MNC, has applied the following regression model to estimate the sensitivity of its cash flows to exchange rate movements:   PCFt = a0 + a1et + mt   where the term on the left-hand side is the percentage change in inflation-adjusted cash flows measured in the firm’s home currency over period t, and et is the percentage change in the exchange rate of the currency over period t. The regression model estimates a coefficient of a1 of -2. This indicates that: