Question: BM sold computer chips from NEC, a Japanese electronics concern, will receive 166 million in three months. Currently, the spot exchange rate is 103/$ and
BM sold computer chips from NEC, a Japanese electronics concern, will receive 166 million in three months. Currently, the spot exchange rate is 103/$ and the three-month forward rate is 120/$. The three-month money market interest rate is 7 percent per annum in the U.S. and 9 percent per annum in Japan. The management of IBM decided to use the money market hedge to deal with this yen receivable.
(a) Compute the dollar revenue (3-month later) of the yen receivable (round your answer to zero decimal, e.g., 39,124)
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