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 $10$ percent per annum in the United States and $9$ percent per annum in Germany. Currently, the spot

exchange rate is $1\mathrm{.}08$ per dollar and the six$-$month forward exchange rate is $1\mathrm{.}06$ 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?