1. Suppose you are working as a portfolio manager for Goldman Sacks and advising Johnson & Johnson, a U.S. Pharmaceutical company, that expects to receive a payment of 500 million Japanese yen in 180 days for goods exported to Japan. The current spot exchange rate is 100 yen per U.S. dollar (e _yen/$=100, or e _$/yen =0.01). You are concerned that due to recent events in Japan, the U.S. dollar is expected to appreciate against the yen over the next 6 months.
   1. Assuming the spot exchange rate remains unchanged, how much does the U.S. company, Johnson & Johnson, expects to receive in U.S. dollar?
   2. How much would Johnson & Johnson receive (in U.S. dollars) if the dollar appreciated to 110 yen per U.S. dollar (e _yen/$=110, or e _$/yen =0.009091)? Compute.
   3. Describe how you could use the forward market to hedge against the risk of losses associated with the potential appreciation in the U.S. dollar. Explain the steps.