Posted: May 3rd, 2016

What are the factors that affect your decision of utilizing spot versus forward exchange rates?

1. You are assigned the duty of ensuring the availability of 100,000 yen for the payment that is scheduled for the next month Considering that your company possesses only U.S. dollars, identify the spot and forward exchange rates. What are the factors that affect your decision of utilizing spot versus forward exchange rates? Which one would you choose? How many dollars do you have to spend to acquire the amount of yen required?