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I was wondering if you would be able to help

me with some International Finance Homework. I am working on an assignment regarding evaluating wether or not to enter into a Futures contract or to perform a Synthetic forward when receiving money from/sending money to other countries. All of our example problems involved receiving money from another country, but I'm having trouble working out the math for how to calculate the Synthetic forward for sending money to another country. Attached is what I have in Excel so far along with all the data needed to complete the question. I have already calculate the payment for the Futures Contract, but it's the synthetic forward I can't figure out. Here is the question, data, and solution to the Futures portion of the question:


A company have to pay 25 million Japanese Yen in December.


•  Should they enter into a futures contract for December or create a synthetic forward? 

•  If it is best to use Futures contracts, how many contracts should they use?


In order to decide what is best you need the December futures for Japanese Yen, the spot exchange rate for Japanese Yen, and the yield of the three month U.S. Treasury bill. The three month Treasury bill issued by the Bank of Japan have a yield of 0.00846 percent per year.


JPY/USD Spot 107.95 [JPY/USD] as of Sep 23 @ 10:14 pm

JPY USD Future 106.94 [JPY/USD]

3-month US Yield 1.91% as of Sep 20

3-month JP Yield0.00846%


1st Part 

FuturesPay 25MM JPY/106.94 [JPY/USD] $  233,775.95 


Synth Fwd.

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