Calculate in yen amounts, Assume you have $1,000,000 U.S

Calculate in yen amounts

Assignment Help Financial Management

Reference no: EM131179613

Assume you have $1,000,000 U.S dollars that you can invest for the next 180 days. Using only the data given below, answer the following questions:

In which country would you invest your $1.0 million if you decided to use the forward market? What would be the dollar amount in after investment in Japan and in the U.S.

Show your calculations. Calculate in Yen amounts. You do not have to convert the spot and forwards to U.S, amounts.

Spot rate = Yen 200/$

180 day forward = Yen 210/$

U.S. Interest Rate 10%

Japanese Rate 10%

Your forecast of the spot rate in 180 days = yen 190

Using The information in the yen question above, would your decision change if you were 100% certain that your forecast would come true? What would be the dollar amount? Show your calculations and explain your answer.

Reference no: EM131179613

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