Returr

Suppose that the treasurer of IBM has an extra cash reserve of $$100,000,000$ to invest for six months. The six$-$month interest rate is $8$ percent per annum in the United States and $7$ percent per annum in Germany. Currently, the spot exchange rate is $1\mathrm{.}21$ per dollar and the six$-$month forward exchange rate is $1\mathrm{.}19$ per dollar. The treasurer of IBM does not wish to bear any exchange risk. Where should they invest to maximize the return?

Required:

a$.$ The maturity value in six months if the extra cash reserve is invested in the U$.$S$.$:

Note: Do not round intermediate calculations.

b$.$ The maturity value in six months if the extra cash reserve is invested in Germany:

Note: Do not round intermediate calculations. Round off the final answer to nearest whole dollar.

c$.$ Where should they invest to maximize the return?

Answer is complete but not entirely correct.

$\backslash$table$[[$a$.,$Maturity value,$$,104,000,000$