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Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry for 300 million Japanese yen payable in one year. The current spot rate is
Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry for 300 million Japanese yen payable in one year. The current spot rate is 135/$ and the one-year forward rate is 120/$. The annual interest rate is 6% in Japan and 9% in the United States. What is the future dollar cost of meeting this obligation using the money market hedge? Question 23 options: a) $2,285,115 b) $2,096,436 c) $2,422,222 d) $2,431,193
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