Chapter 8, post-lecture 6 Saved Help Save& Exit Submit Check my work 5 XYZ Corporation, located in the United States, has an accounts payable obligation of *750 million payable in one year to a bank in Tokyo. The current spot rate is *116/$1.00 and the one year forward rate is 109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. XYZ can also buy a one-year call option on yen at the strike price of $0.0086 per yen for a premium of 0.012 cent per yen. The future dollar cost of meeting this obligation using the forward hedge is 5 points eBook Print Mc Graw Hill Prev5 of 5Next