Abstract Blades‚ Incorporated has been exporting to Thailand since its decision to supplement its declining U.S. sales. This decision seems ideal due to the Southeast Asia fast growing economies. With this in mind‚ this paper will analyze the Blades‚ Inc. case in Chapter 5 of the textbook by discussing the feasibility for Ben Holt‚ the chief financial officer‚ to move forward to hedging Blades’ yen payables position‚ the advantages and disadvantages associated with purchasing derivatives instruments
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inherent in the option investment strategies‚ please perform the following analyses for call and put options on Lotus’s common stock that mature in February 1994 and that have an exercise price of $55 per share. a. Compute net profits and losses per share (actual dollar profit and losses‚ not rates of return) at expiration (February 19‚ 1994) for the following investment strategies: Buying a call option on Lotus’s stock; Writing a call option on Lotus’s common stock; Buying a put option on Lotus’s
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exchange rate fluctuations may impact on profits. Hedging is some form insuring revenues from exchange rate fluctuations. QN1. Compare the hedging alternatives for the THB with a scenario under which Blades remains un-hedged. Do you think Blades should hedge or remain un-hedged? If Blades should hedge‚ which hedge is most appropriate? Net Baht to be paid/received in 3 months = 45‚000 pairs × 4‚594 per pair =206‚730‚000 Baht outflows ………………………..18‚000 (pairs) × 3000 (Cost per
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The history of the Yen The origin of Japanese currency can be traced to the Wu Zhu bronze coin of China‚ which was introduced under the Han Dynasty around 221 BC. Until the 8th Century the Japanese imported such coins from China. However‚ in 708 the Japanese government began minting their own silver and copper coins called the Wado Kaichin or Wado Kaiho‚ which imitated the Chinese Kai Yuan Tong Bao coin ’s size‚ shape‚ and weight. Approximately 250 years later though‚ the Japanese government
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POINT/COUNTER-POINT: Should Speculators Use Currency Futures or Options? POINT: Speculators should use currency futures because they can avoid a substantial premium. To the extent that they are willing to speculate‚ they must have confidence in their expectations. If they have sufficient confidence in their expectations‚ they should bet on their expectations without having to pay a large premium to cover themselves if they are wrong. If they do not have confidence in their expectations‚ they
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E- Business at HEDGE EQUITIES PVT LTD Introduction to HEDGE EQUITIES PVT LTD Team Hedge is a balanced mix of more than 15 years experience cutting across various industries with a strong background in the financial markets. The board comprises of six power houses in their respective fields - Fedex Securities‚ Baby Marine Exports‚ Thakker Developers‚ Smart financial‚ SM Hegde (CFO‚ Videocon Industries) and Padmashree Mohan Lal Fedex Securities Managed
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agrees to the new Novo sale‚ determine the present value of the expected future cash inflow assuming: (1) there is no hedge‚ (2) the company hedges using a forward contract‚ and (3) the company hedges using the money market. Finding a present value is necessary for the following reason: With no hedge or a with forwardcontract hedge‚ the cash flow will occur at the
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. What features of the 100 Yen Sushi House service delivery system differentiate it from the competition‚ and what competitive advantages do they offer? The main differentiating factor of 100 Yen Sushi House is its production-line approach to food preparation and service. Even the customers are included in the production line. The rate at which customers enter the restaurant‚ remove dishes from the food train‚ and leave the restaurant determines the flow of the delivery process. This "pull"
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Table 4.8 The Use of Hedge by Trump. Type of Disagreement Frequency Utterance The use of Hedge 3 The NAFTA agreement is defective. Just because of the tax and many other reasons‚ but just because of the fact... (Datum 1) Well‚ could I just finish -- I think I... (Datum 2) I think it’s disgraceful. (Datum 3) Datum 1 Utterance above is included into the use of hedge. It is indicated by the present of word “just”‚ this word function to soften the disagreement. In this case Trump try to argue
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Hedge Fund A Hedge Fund is a portfolio of investments hoping to reduce the risk of investment and expanding the maximum return an investment could bring. A firm instead of individuals usually manages it. Usually‚ hedge funds are only offered to a number of investors and requires a large amount of initial minimum investment‚ it’s usually 1 million dollars in the USA. Adding on‚ investors are usually required to keep their initial investment in the fund for at least a year. Hedging is usually
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