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Suppose that the treasurer of IBM has an extra cash reserve of $ 1 0 0 , 0 0 0 , 0 0 0 to
Suppose that the treasurer of IBM has an extra cash reserve of $ to invest for six months. The sixmonth interest rate is percent per annum in the United States and percent per annum in Germany. Currently, the spot exchange rate is per dollar and the sixmonth forward exchange rate is 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 US:
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?
tableaMaturity value,bMaturity value,cBetter investment,
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