IBM Corporation, located in the United States, has an accounts payable obligation of ¥750 million payable in one year to

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

IBM Corporation, located in the United States, has an accounts payable obligation of ¥750 million payable in one year to

Post by answerhappygod »

Ibm Corporation Located In The United States Has An Accounts Payable Obligation Of 750 Million Payable In One Year To 1
Ibm Corporation Located In The United States Has An Accounts Payable Obligation Of 750 Million Payable In One Year To 1 (95.39 KiB) Viewed 39 times
IBM Corporation, located in the United States, has an accounts payable obligation of ¥750 million payable in one year to a bank in Tokyo. The current spot rate is \116/$1.00. The annual interest rate is 4 percent in Japan and 8 percent in the United States. IBM can also buy a one-year call option on yen at the strike price of $0.0085 per yen for a premium of 0.012 cent per yen. Assume that the realized spot rate in one 1 year is \125/$1.00. The future dollar cost of meeting this obligation using the option hedge is None of the options $6,880,734 $6,472,200 $6,545,400 $6,097,200
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”