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B&H is a multinational company and expects to receive 25,000,000 Japanese yen (JPY) in 90 days from a Japanese company. You are given the following
B&H is a multinational company and expects to receive 25,000,000 Japanese yen (JPY) in 90 days from a Japanese company.
You are given the following information:
B&H’s 90-day account receivable: JPY25,000,000
Spot rate: JPY106.21 / USD
B&H’s best estimate of the expected spot rate in 90 days: JPY109.61 / USD.
Deposit rate in USD is 3%
Deposit rate in JPY is 6%
Calculate the 90 days forward rate.
Calculate how much B&H will receive.
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To calculate the 90day forward rate we can use the interest rate parity formula F...
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
6th edition
9781305178045, 1285429648, 1305178041, 978-1285429649
