Question: please provide calculation steps 15. IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed 4250 million payable in three months. Currently,

please provide calculation steps 15. IBM purchased computer chips from NEC,

please provide calculation steps

15. IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed 4250 million payable in three months. Currently, the spot exchange rate is V105/$ and the three-month forward rate is V100/S. The three-month money market interest rate is 8 percent per annum in the U.S. and 7 percent per annum in Japan. The management of IBM decided to use the money market hedge to deal with this yen account payable. Explain the process of a money market hedge and compute the dollar cost of meeting the yen obligation

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