excess cash of 50000000000 won in a Seoul bank and it is from these funds that

Excess cash of 50000000000 won in a seoul bank and it

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excess cash of 50,000,000,000 won in a Seoul bank, and it is from these funds that KAL plans to make its next payment.Spot rate 1200 won/$Three-month forward rate 1179 won/$Korean three-month interest rate 5% per annumU.S. three-month interest rate 4% per annumThese are the only rates available to KAL for either borrowing or investing. A three-month call option in the over-the-counter (bank) market at a strike price of 1189 won/$ sells at a premium of 0.5% payable at the time the option is purchased. KAL's foreign exchange advisor forecasts the spot rate in three months to be 1192 won/$.How should KAL plan to make the second payment to McDonnell Douglas if KAL's goal is to maximize the amount of won cash left in the bank at the end of three months? That is, how much in won would be left under each possible alternative? Which alternative do you recommend, and why? CH. 11,12,13 INTERNATIONAL FINANCIAL INSTITUTIONS AND MARKETS * INTERNATIONAL BUSINESS AGENCIES
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- IMF - IBRD/IFC/IDA - WTO - BIS - REGIONAL AGENCIES International Money and Capital Markets · What are required for business development? · Why a bank wants to establish multinational operations? 1) not subject to regulations of the
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- Eurocurrency – time deposit (CD) in a currency, outside of the country of the currency. E.g., Eurodollar: $ deposit in a bank outside of the US. · International Capital Markets - Eurocredit (Euronotes) – medium-term funds Note: Eurobanks control interest rate risk using floating rate Eurocredit loans or Forward Rate Agreement (FRA, an interbank contract allowing the Eurobank to hedge the interest rate risk in mismatched (maturity) deposits and loans by the forward rate). - Eurobonds – long-term cf) foreign bonds: issued by a foreign investor * International Stock Markets * Valuation of Foreign Stocks * How to invest internationally * Exchange rate risk of foreign stocks CH. 14 INTEREST RATE AND CURRENCY SWAPS * INTEREST SWAPS - EXAMPLE * CURRENCY SWAPS CH. 18, 19, 20, 21 OTHER ISSUES IN INTERNATIONAL FINANCE
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  • Spring '11
  • Johnson
  • Exchange Rate, Foreign exchange market, Spot price

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