The Spot Rate Exchange Rate for Andromedan Pixels (ANP)is 3

question 25

Multiple Choice

The spot rate exchange rate for Andromedan Pixels (ANP) is 3.00ANP/$.If the risk-free rate of return in Andromeda is 20% per annum while that in the U.S.is 3%,then what amount of U.S.dollars should you be able to convert 3,000,000 ANP into 1-year from now if you choose to begin hedging today?

• A) $1,165,049
• B) $1,000,000
• C) $858,333
• D) $833,333

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