P&G India. Procter 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 an $8\mathrm{.}5$ million Japanese yen payable. Although options are

not available on the Indian rupee $($INR$),$ 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 $4\mathrm{.}85\%$ fee. Using the following exchange rate and interest rate data, recommend a

hedging strategy.