Suppose that the treasurer of ibm has an extra cash reserve, Ask an Expert

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Suppose that the treasurer of IBM has an extra cash reserve of $ 100,000,000 to invest for six months. The six- month interest rate is 6 percent per annum in the United States and 5 percent per annum in France. Currently, the spot exchange rate is € 1.15 per dollar and the six- month forward exchange rate is € 1.14 per dollar. The treasurer of IBM does not wish to bear any exchange risk. Where should he or she invest to maximize the return? What would be the return?

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Financial Management, Finance

Category:- Financial Management
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