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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
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 1.01 per dollar and the six-month forward exchange rate is 0.99 per dollar. Part 1: If investing in the U.S, six month later, IBM will get \$ currency symbol, just enter the amount since it clearly will be US \$.) Part 2: If investing in Germany, six month later, IBM will get \$ currency symbol, just enter the amount since it clearly will be US \$.) (total amount, using the format, e.g., 20,000. In other words, do NOT use any (total amount, using the format, e.g., 20,000. In other words, do NOT use any
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