B&H is a multinational company and expects to receive 25,000,000 Japanese yen (JPY) in 90 days from

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B&H is a multinational company and expects to receive 25,000,000 Japanese yen (JPY) in 90 days from a Japanese company.

You are given the following information:

B&H’s 90-day account receivable: JPY25,000,000

Spot rate: JPY106.21 / USD

B&H’s best estimate of the expected spot rate in 90 days: JPY109.61 / USD.

Deposit rate in USD is 3%

Deposit rate in JPY is 6%

Calculate the 90 days forward rate.

Calculate how much B&H will receive.

Related Book For answer-question

Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

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Posted Date: Jun 10, 2023 11:19 AM

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B&H is a multinational company and expects to receive 25,000,000 Japanese yen (JPY) in 90 days from

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Expert Answer:

To calculate the 90day forward rate we can use the interest rate parity formula F... View the full answer

Principles of Finance

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