Question
Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at a price of 200 million. The equipment is to be
Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at a price of 200 million. The equipment is to be delivered to the United States and paid for in one year. The current exchange rate is 97=$1.The current interest rate on one-year U.S. Treasury bills is 8 %, and on one-year Japanese government bonds, the interest rate is 6 %.
a. If Halliburton exchanges dollars for yen today and invests the yen in Japan for one year, it will need______$ to exchange today in order to have 200
million in one year. (Round your response to the nearest dollar.)
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