Question: ill leave a like! IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed X211 million payable in three months. Currently, the

ill leave a like!

IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed X211 million payable in three months. Currently, the spot exchange rate is W114/$ and the three-month forward rate is 106/$. The three month money market interest rate is 11.1 percent per annum in the U.S. and 7.8 percent per annum in Japan. The management of IBM decided to use the money market hedge to deal with this yen account payable. (a) Compute the dollar cost (today) of meeting the yen obligation (round your answer to zero decimal, e.g., 39,124)

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