Suppose Ace International Company Decides at T+18 to Use a Six-Month

Essay

Suppose Ace International Company decides at t+18 to use a six-month contract to hedge the t + 24 receipt of yen from Kensui Incorporated.Six-month interest rates (annualized)at t + 18 are 5.9% in dollars and 2.1% in yen.The 6 month forward rate at time t + 18 is ¥128.58.With this hedge in place,what fixed dollar amount would Ace have paid and received at time t + 24?