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Your company can get yen loans for 2.0%. Dollar rates on the same loans are 4.5%. The spot yen per dollar exchange rate is 104.
Your company can get yen loans for 2.0%. Dollar rates on the same loans are 4.5%. The spot yen per dollar exchange rate is 104. The forward rates for years 1 thru 4 are, 101.51, 99.08, 96.71, and 94.40, respectively. What is the present value of the market-makers net cash flow if spot rates are 102 instead? A) $188.59 B) $206.43 C) $219.96 D) $242.06 PLEASE SHOW WORKING OUT.
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