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