### How many us dollars must be raised

Assignment Help Financial Management
##### Reference no: EM13529080

A U.S. company orders merchandise from a Japanese company at a cost of 100 million yen. The merchandise must be paid for in yen

 Yen per \$1 \$ per 1 yen Spot 97.57 0.01025 30-day forward 97.45 0.01026 90-day forward 96.31 0.01038 180-day forward 92.45 0.01082

a. How many U.S. dollars must be raised if payment is due today?

b. Is the dollar appreciating or depreciating against the yen? Explain.

c. How many U.S. dollars must be raised if payment is due in 90 days?

d. Who bears exchange rate risk, the U.S. company or the Japanese company or both? Explain.

e. Describe 3 ways in which the company can reduce exchange rate risk.

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