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Describe the money market approach

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Money market Approach

U.S based firm has 100,000,000 Y A/R due in one year

Spot rate of Yen/Dollar is 114Y

Borrow/invest rate in Japan is: borrow 1.00%, invest 1.25%

Borrow/invest rate in US is: Borrow 2.00%, invest 3.00%

Describe the money market approach, how it would work, and how much the firm ends up with

Reference no: EM131886441

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