A Japanese exporter has a €1,000,000 receivable due in one year. Spot and forward exchange rate data is given: Spot exchange rates 1-year Forward Rates Contract size $ 1.20 = € 1.00 $ 1.25 = € 1.00 € 62,500 $ 1.00 = ¥ 100 $ 1.00 = ¥ 120 ¥ 12,500,000 The one-year risk free rates are i$ = 4.03%; i€ = 6.05%; and i¥ = 1%. Detail a strategy using forward contracts

Find the strategy in the explanation.

Step-by-step explanation:

He should Sell €1m forward using 16 contracts at the forward rate of $1.25 per €1. This will generate an obligation of $1250000. After this, he should buy ¥150,000,000 forward using 12 contracts, at the forward rate of $1.00 = ¥120.

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i dont know sorry

step-by-step explanation: