ople Tab Window Help TO E chapter 10 advanced problem X C Chronos Time Pieces, Chronos x G how to remove space on go AlgRxDF9OXG35vimxtCmrUeQeRILBb7FM4/edit 2 31 5 Problem 10.4 P & G India Proctor and Gamble's affiliate in India, P&G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer. P & G India wishes to hedge a 8.5 million Japanese yen payable. Although options are not available on the Indian rupee (Rs), forward rates are available against the yen. Additionally, a common practice in India is for companies like P&G India to work with a currency agent who will, in this case, lock in the current spot exchange rate in exchange for a 5% foe. Using the following exchange rate and interest rate data, recommend a hedging strategy Assumptions Values 180-day account payable, Japanese yen (1) 8,000,000 Spot rate (WS) 120.00 Spot rate, rupees/dollar (Rs/S) 48.00 Implied (calculated) spot rate (W/Rs) 2.5000 2.4000 2.6000 6.000% 180-day forward rate (WRs) Expected spot rate in 180 days (W/Rs) 180-day Indian rupee investing rate 180-day Japanese yen investing rate Currency agent's exchange rate fee P&G India's cost of capital 1.000% 5.000% 8.00% Problem 10.2. Bobcat Company OCT ople Tab Window Help TO E chapter 10 advanced problem X C Chronos Time Pieces, Chronos x G how to remove space on go AlgRxDF9OXG35vimxtCmrUeQeRILBb7FM4/edit 2 31 5 Problem 10.4 P & G India Proctor and Gamble's affiliate in India, P&G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer. P & G India wishes to hedge a 8.5 million Japanese yen payable. Although options are not available on the Indian rupee (Rs), forward rates are available against the yen. Additionally, a common practice in India is for companies like P&G India to work with a currency agent who will, in this case, lock in the current spot exchange rate in exchange for a 5% foe. Using the following exchange rate and interest rate data, recommend a hedging strategy Assumptions Values 180-day account payable, Japanese yen (1) 8,000,000 Spot rate (WS) 120.00 Spot rate, rupees/dollar (Rs/S) 48.00 Implied (calculated) spot rate (W/Rs) 2.5000 2.4000 2.6000 6.000% 180-day forward rate (WRs) Expected spot rate in 180 days (W/Rs) 180-day Indian rupee investing rate 180-day Japanese yen investing rate Currency agent's exchange rate fee P&G India's cost of capital 1.000% 5.000% 8.00% Problem 10.2. Bobcat Company OCT
