keshi co (dec 16)

This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.

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February 29, 2024 at 12:08 pm #701458
zaynnnn
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how to know if its forriegn exchange or interest rate as its not mentioned in the question.
February 29, 2024 at 3:15 pm #701473
John Moffat
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The question makes it clear throughout that they want to hedge against changes in interest rates.
They are borrowing money (and there is no mention of exchange rates anywhere in the question).
Obviously for part (b) it is important to mention the other roles of the treasury department (as are listed in the first paragraph).
March 3, 2024 at 7:34 pm #701871
zaynnnn
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how have they made it clear that they wanted to hedge against interest rates
March 4, 2024 at 8:00 am #701896
John Moffat
Keymaster
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The second and third paragraphs of the question state that they are borrowing money and are unsure about the interest rates.
Requirement (a) asks for a recommendation as to a hedging strategy for the borrowing.
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