Boston Co. will receive 1 million euros in one year

Boston Co. will receive 1 million euros in one year from selling exports. It did not hedge this future transaction. Boston believes that the of the euro will be determined by purchasing power parity (PPP). It expects that inflation in countries using the euro will be 12% next year, while inflation in the U.S. will be 7% next year. Today the spot rate of the euro is $1.46, and the one-year forward rate is $1.50.

a. Estimate the amount of U.S. dollars that Boston will receive in one year when converting its euro receivables into U.S. dollars.

b. Today, the spot rate of the Hong Kong dollar is pegged at $.13. Boston believes that the Hong Kong dollar will remain pegged to the dollar for the next year. If Boston Co. decides to convert its 1 million euros into Hong Kong dollars instead of U.S. dollars at the end of one year, estimate the amount of Hong Kong dollars that Boston will receive in one year when converting its euro receivables into Hong Kong dollars.

 

Stressed over that homework?

Essay deadline breathing down your neck?

Let’s cut to the chase: Why struggle when you can ace it with zero hassle?

Whether it’s essays, research papers, or assignments — we’ve got you covered.

✅ Expert writers
✅ 100% original work
✅ No AI tools, just real pros

Stressed about your essay or homework? Get a top-quality custom essay NOW!!! Stop worrying. Start succeeding.

GradeEssays.com
We are GradeEssays.com, the best college essay writing service. We offer educational and research assistance to assist our customers in managing their academic work. At GradeEssays.com, we promise quality and 100% original essays written from scratch.
Contact Us

Enjoy 24/7 customer support for any queries or concerns you have.

Phone: +1 213 3772458

Email: support@gradeessays.com

© 2020 -2025 GradeEssays.com. All rights reserved.

WE HAVE A GIFT FOR YOU!

15% OFF 🎁

Get 15% OFF on your order with us