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First Box: - 109.38m yen - 108.9981m yen - one mill USD Second...

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Finance

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First Box:

- 109.38m yen

- 108.9981m yen

- one mill USD

Second Box:

- 0.25 % p.a

- -0.10% p.a.

Third Box:

- JPY

-USD

Fourth Box:

- JPY 109.3800

-JPY 108.9981

Fifth Box:

- -0.10% p.a.

- 0.25% p.a.

(Disregard all questions before). Shimamo has entered into a forward contract with its bank, Mizuho, to exchange one million US dollars for Japanese yen in one year time at the forward rate of JPY108.9981/USD. The spot rate is JPY109.3800/USD. The USD interest rate is 0.25% p.a. and the JPY interest rate is -0.10% p.a. To hedge its exposure with a cash and carry strategy, Mizuho needs to borrow against 4 at the interest rate of ^ , exchange for at the exchange rate and deposit at the interest rate of A for one year. (Disregard all questions before). Shimamo has entered into a forward contract with its bank, Mizuho, to exchange one million US dollars for Japanese yen in one year time at the forward rate of JPY108.9981/USD. The spot rate is JPY109.3800/USD. The USD interest rate is 0.25% p.a. and the JPY interest rate is -0.10% p.a. To hedge its exposure with a cash and carry strategy, Mizuho needs to borrow against 4 at the interest rate of ^ , exchange for at the exchange rate and deposit at the interest rate of A for one year

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