Money Market Hedging

This topic has 2 replies, 2 voices, and was last updated 5 years ago by John Moffat.

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September 4, 2020 at 4:11 pm #583464
james8500
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Question 298 in BPP Exam kit – why does the receipt not need to be hedged?

Thanks
September 4, 2020 at 4:13 pm #583465
james8500
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That is, the receipt of 500,000 in 6 months.

In the solution, only the 300,000 payment was hedged.

I would have thought the net amt would have been hedged.
September 4, 2020 at 4:44 pm #583480
John Moffat
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The receipts is in dollars and PGT has the dollar as its home currency. There is no exchange rate risk for the payment.
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