Suppose PepsiCo hedges a 1 billion yen dividend that it expects to receive from its Japanese subsidiary in 90 days with a forward contract. The current spot rate is 150 yen/$1 and the 90-day forward rate is 149 yen/$1. If the 90-day spot rate is ¥154/$, how much has this forward market hedge cost PepsiCo?

Answer rating: 100% (QA)

To determine the cost of the forward market hedge for PepsiCo we need to compare the cost of the ... View the full answer