Your company will recieve $500$ million yen in one year from now from a japanese company. Yen: $ Spot rate Yen$150$:$$1$ $ interest rate $7\mathrm{.}0\%$ Yen: Forward rate Yen $125$:$$11$ year Yen interest rate $5\mathrm{.}0\%.$ you can also buy calls or puts with an exercise price of Yen $135$:$$1$ cost to use put pf call for yen $500$ milllion of coverage is $$150,000.$ Why would the company want to hedge? When the recieveable is due the yen:$ is yen $140$:$$1.$ what will your dollar proceeds if you do not hedge? When the recieveable is due the yen:$ exchange rate is yen $140$:$$1.$ What will your US dollar be if you hedged a future contract?