# Blackthorn Case Study Analysis Help With Solution

## Blackthorn Case Study Analysis Help With Solution

Finish in excel sheets
As you know, Yoda Corporation, a division of Blackthorn imports goods from New Zealand, and plans to purchase NZ\$ 10,000,000 of goods one quarter from now. You have already run several regressions for them in the regression case. Now the Treasurer of Blackthorn wishes you to develop forecasts to use to decide on appropriate hedging strategies for the purchase using revised data.

You are tasked with using regression to assess three different hypothesizes to forecast the value of the NZ\$ at the end of the quarter (FSR the future spot rate), and then using those to determine an optimal hedging strategy.

1. FSR is determined by the Forward rate at the beginning of the quarter

2. FSR is determined by the spot rate at the beginning of the quarter.

3. Estimating the relationship between the inflation differential during each quarter and the percentage change in the NZ\$. Then using an estimate of the current inflation differential, predict the expected percentage change (using equation below) and then use that % change to modify the current spot to determine FSR.

Expected percentage change in NZ\$=a+b*(Last Q inflation diff)

4. The treasurer plans to develop a probability distribution for FSR. First it will assign a 40% probability to the forecast based on inflation differential, 40% based on the forecast that was most successful in meeting the requirements for a “good regression” from the forward and spot regressions, and 20% on the least accurate of those two regressions.

## How it Works

#### How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id support@assignmentconsultancy.com with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.

Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id assignmentconsultancy.help@gmail.com and support@assignmentconcultancy.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.

Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.

Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.

Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.

## Features

#### Features for Assignment Help

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.

Relevancy
We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.

Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.

100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

## Related Services

5. Then complete the following table:
Probability
FSR \$/nz\$
payments if no hedge
amount need if Forward hedge
Real Cost Hedge
Regression used
0.4

0.4

0.2

6. What is the expected cost of not hedging versus the forward hedge?

7. Other than the forward hedge, Blackthorn can use a money market hedge or a call option to hedge. From the data below, determine the probability distribution of the dollars needed for a call option if used (include the premium paid) by filling out the following table.

Probability
FSR \$/nz\$
will you expect to exercise given exercise price \$.60
what it costs per unit
0.4

0.4

0.2

Data: ​90-day U.S. borrowing rate =2.5%
​90 day U.S. investing rate= 2.3%
​90 day New Zealand borrowing rate =2.4%
​90 day New Zealand investing rate= 2.1%
​Call option on NZ\$ has premium of .01 per unit
​Call option on NZ\$ has an exercise price of \$.60

8. Compare the forward hedge to the money market hedge. Which is superior? (compute both)

9. Compare the superior hedge in 9, to the option hedge. Which is superior?

10.Compare the hedge you believe is best to the unhedged strategy? Should you hedge?

### Product Code :Case39

To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)

You can also email us at assignmentconsultancy.help@gmail.com but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.

Summary
User Rating