Demonstrate how you would hedge LorBoh’s foreign exchange risk exposure on the money markets.Compare the forward market hedge to that of the money market hedge.
Lor Boh GmbH is a medium-sized tea producer company, based in Berlin. It is now 1 December and the following transactions have been contractually agreed: i. Sale of packaged tea, cash receipt due 1 February of US$197,000 Purchase of production equipment, invoice payable 1 May, for US$447,000 Sale of packaged tea, US$154,000 cash receipt due […]