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2. You are a financial adviser to a U.S. corporation that expects to receive a payment of 60 million Japanese yen in 180 days for

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2. You are a financial adviser to a U.S. corporation that expects to receive a payment of 60 million Japanese yen in 180 days for goods exported to Japan. The current spot rate is 100 yen per U.S. dollar (Ey/S 100.00). You are concerned that the U.S. dollar is going to appreciate against the yen over the next six months. (a) Assuming the exchange rate remains unchanged, how much does your firm expect to receive in U.S. dollars? (b) How much would your firm receive (in U.S. dollars) if the dollar appreciated to 110 yen per U.S. dollar? (c) Describe how you could use a forward contract to hedge against the risk of losses asso- ciated with the potential appreciation in the U.S. dollar

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