Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at a price of ¥250 million. The equipment is to be delivered to the United States and paid for in one year. The current exchange rate is ¥97 = $1. The current interest rate on one-year U.S. Treasury bills is 8%, and on one-year Japanese government bonds the interest rate is 6%. a. If Halliburton exchanges dollars for yen today and invests the yen in Japan for one year, it will need $☐ to exchange today in order to have ¥250 million in one year. (Round your response to the nearest dollar.)

Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at a price of ¥250 million. The equipment is to be delivered to the United States and paid for in one year. The current exchange rate is ¥97 = $1. The current interest rate on one-year U.S. Treasury bills is 8%, and on one-year Japanese government bonds the interest rate is 6%. a. If Halliburton exchanges dollars for yen today and invests the yen in Japan for one year, it will need $☐ to exchange today in order to have ¥250 million in one year. (Round your response to the nearest dollar.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter6: Managing In The Global Economy

Section: Chapter Questions

Problem 12E

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