Company A in dollar zone owes Company B in yen zone in the amount of 25 million

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Company A in dollar zone owes Company B in yen zone in the amount of ¥25 million (A/P), and the payment is scheduled in 3 months. A and B have agreed on the following risk-sharing arrangement on the payment day: if the spot exchange rate turns out to be between ¥115/$ - ¥125/$, then they settle at that spot rate; if the spot rate turns out to be outside this range, A and B split the burden/risks 50:50. Suppose the spot rate turns out to be ¥110/$ on the payment day, how much does A owe B?

Posted Date: Dec 10, 2021 12:06 PM

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Company A in dollar zone owes Company B in yen zone in the amount of 25 million

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Answer 25M AP t 3 monthe so spot date is ... View the full answer

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