Money Market Hedge Japanese Yen ¥ 250,000,000 Receivable In 3 months Spot Rate ¥105/$ Forward 3 months is...

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Finance

Money Market Hedge
Japanese Yen ¥ 250,000,000 Receivable
In 3 months Spot Rate ¥105/$
Forward 3 months is ¥100/$ 3M
iUS = 8% per year
iJPY = 7% per year
1. P.V. of receivable?
2. Covert P.V. of receivable at Spot rate?
3. At maturity loan?
Please show formulas and steps. Thank You

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4.3 Ratings (777 Votes)

1 P V Of recievables i JPY quarterly 7 312 months i JPY quarterly 175 or 00175 Recievables 250000000 P V Of recievables Recievables 1 i P V Of recievables 250000000 1 00175 P V Of recievables See Answer

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Money Market HedgeJapanese Yen ¥ 250,000,000 ReceivableIn 3 months Spot Rate ¥105/$Forward 3 months is ¥100/$ 3MiUS = 8% per yeariJPY = 7% per year1. P.V. of receivable?2. Covert P.V. of receivable at Spot rate?3. At maturity loan?Please show formulas and steps. Thank You