How many dollars will the company pay for the 4000000 yen


A US company expects to pay 4,000,000 Japanese yen 30 days from now. It decides to hedge thee position by buying Japanese yen forward. The current spot rate of the yen is $.0089, while the forward rate is $0.0077. The firm expects the spot rate in 30 days to be $.0094. Based on its expectations the company enters into derivative contracts to maximize its profits. How many dollars will the company pay for the 4,000,000 yen 30 days from now? Answer =30,800.00

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Finance Basics: How many dollars will the company pay for the 4000000 yen
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