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    Pixonix Case

    Uploaded by

    Neha Nagar
    The document shows various currency exchange rate scenarios for converting $7.5 million USD to CAD. It compares the costs of an unhedged position, forward contract, and options contracts at different strike prices. The options contracts provide the potential to profit depending on where the exchange rate ends, while limiting downside costs compared to an unhedged position.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Pixonix Case

    Uploaded by

    Neha Nagar
    452 views4 pages
    The document shows various currency exchange rate scenarios for converting $7.5 million USD to CAD. It compares the costs of an unhedged position, forward contract, and options contracts at different strike prices. The options contracts provide the potential to profit depending on where the exchange rate ends, while limiting downside costs compared to an unhedged position.

    Original Description:

    case study of International Financial Management

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    © © All Rights Reserved

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    The document shows various currency exchange rate scenarios for converting $7.5 million USD to CAD. It compares the costs of an unhedged position, forward contract, and options contracts at different strike prices. The options contracts provide the potential to profit depending on where the exchange rate ends, while limiting downside costs compared to an unhedged position.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    452 views4 pages

    Pixonix Case

    Uploaded by

    Neha Nagar
    The document shows various currency exchange rate scenarios for converting $7.5 million USD to CAD. It compares the costs of an unhedged position, forward contract, and options contracts at different strike prices. The options contracts provide the potential to profit depending on where the exchange rate ends, while limiting downside costs compared to an unhedged position.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    OPTIONS

    Column1 Column2
    Scenarios Premium
    US$ = 0.9CAD 121329.225
    US$ = 1CAD 121329.225
    US$ = 1.1CAD 121329.225

    Scenarios Premium
    US$ = 0.9CAD 105198.75
    US$ = 1CAD 105198.75
    US$ = 1.1CAD 105198.75

    Scenarios Premium
    US$ = 0.9CAD 90470.925
    US$ = 1CAD 90470.925
    US$ = 1.1CAD 90470.925

    Scenarios Premium
    US$ = 0.9CAD 77847.075
    US$ = 1CAD 77847.075
    US$ = 1.1CAD 77847.075
    UNHEDGED POSITION
    Scenarios $7.5mn to CAD cost
    US$ = 0.9CAD 6.75
    US$ = 1CAD 7.5
    US$ = 1.1CAD 8.25

    FORWARD CONTRACT
    Scenarios $7.5mn to CAD cost
    US$ = 0.9CAD 6.75
    US$ = 1CAD 7.5
    US$ = 1.1CAD 8.25

    At Strike Price=0.9350 Column3


    $7.5mn in CAD at jan strike price rate(=0.935)(ask) Total Cost
    6750000 6871329.225
    7012500 7133829.225
    7012500 7133829.225

    At Strike Price=0.9400
    $7.5mn in CAD at jan strike price rate(=0.9400)(ask)Total Cost
    6750000 6855198.75
    7050000 7155198.75
    7050000 7155198.75

    At Strike Price=0.9450
    $7.5mn in CAD at jan strike price rate(=0.9450)(ask)Total Cost
    6750000 6840470.925
    7087500 7177970.925
    7087500 7177970.925

    At Strike Price=0.9500
    $7.5mn in CAD at jan strike price rate(=0.9500)(ask)Total Cost
    6750000 6827847.075
    7125000 7202847.075
    7125000 7202847.075
    $7.5mn in CAD at cProfit/Loss in CAD mn
    7.01325 -0.26325
    7.01325 0.48675
    7.01325 1.23675

    $7.5mn in CAD at 3Profit/Loss in CAD mn


    7.012425 -0.262425
    7.012425 0.487575
    7.012425 1.237575

    Column4 Column5 Column6 Column7 Column8


    Unhedge Position Profit/Loss in CAD mn
    6750000 -121329.225 (The only cost here would be premium because the o
    7500000 366170.775
    8250000 1116170.775

    Unhedge Position Profit/Loss in CAD mn


    6750000 -105198.75 (The only cost here would be premium because the o
    7500000 344801.25
    8250000 1094801.25

    Unhedge Position Profit/Loss in CAD mn


    6750000 -90470.9249999998 (The only cost here would be premium because the o
    7500000 322029.075000001
    8250000 1072029.075

    Unhedge Position Profit/Loss in CAD mn


    6750000 -77847.0750000002 (The only cost here would be premium because the o
    7500000 297152.925
    8250000 1047152.925
    Column9 Column10 Column11 Column12 Column13 Column14

    emium because the option will not be executed)

    emium because the option will not be executed)

    emium because the option will not be executed)

    emium because the option will not be executed)

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