2. Boston Scientific Corporation, an American producer of medical products, sold coronary stent systems to a Japanese hospital holding company and billed 100,000,000 yen due in 3 months. Boston Scientific is concerned about the yen proceeds from international sales and would like to control exchange risk. The current spot exchange rate is 139.91/$ and March futures contracts for Japanese yen are currently trading for $0.007172. Yen futures are for 12,500,000.

a. What is the forex concern for Boston Scientific Corporation?

b. What position should Boston Corporation take in the futures market to hedge their exposure?

c. In February, the manager decides to exit the futures contract. Upon exit, the spot rate is 135/$ and the March futures are trading at $0.00748/. What is the outcome for Boston Scientific?

d. Do you agree with managements decision to exit the futures position?