Suppose that the treasurer of IBM has an extra cash reserve of $400,000 to invest for six months. The six-month interest

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answerhappygod
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Suppose that the treasurer of IBM has an extra cash reserve of $400,000 to invest for six months. The six-month interest

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Suppose that the treasurer of IBM has an extra cash reserve of$400,000 to invest for six months. The six-month interest rate is4.7 percent per annum in the United States and 3.0 percent perannum in Germany. Currently, the EUR/USD is 1.2237 and thesix-month forward exchange rate is1.2357. The treasurer of IBM doesnot wish to bear any exchange risk. How much would IBM have if theychoose to invest in Europe hedging their risk? (USD, no cents)
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