Question

The current U.S. dollar - yen spot rate is 105 ¥ / S . If the...

The current U.S. dollar - yen spot rate is 105 ¥ / S . If the 90 - day forward exchange rate is 102 ¥/$ what is the forward exchange premium or discount for ¥/ $
Write your answer to 2 decimal in percentage ( for Example 12.65 % )

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please refer to the image below for the solution

Do leave an upvote if you find this helpful. In case of any doubt please let me know in the comment section.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following are the spot and forward bid and ask rates for the Japanese yen/U.S. dollar...
The following are the spot and forward bid and ask rates for the Japanese yen/U.S. dollar (¥/$) exchange rate from January 20, 2011. By referring to these rates, answer the following questions (the US dollar is the home currency): Period Yen/$ Bidrate Yen/$ Ask Rate spot 85.41 85.46 1 month 85.02 85.05 2 months 84.86 84.90 3 months 84.37   84.42      a) Calculate the mid-rate for these maturities b) Calculate the annual forward premium for these maturities
The spot rate of exchange between the U.S. dollar and the euro is 1.35 (dollar/euro) and...
The spot rate of exchange between the U.S. dollar and the euro is 1.35 (dollar/euro) and the three-month forward rate of exchange is 1.29. Select one: a. The euro is selling at a discount and the standard forward discount is 17.78 percent. b. The euro is selling at a premium and the standard forward premium is 18.60 percent. c. The euro is selling at a premium and the standard forward premium is 15.78 percent. d. The euro is selling at...
Assume the spot exchange rate is 106.90 Japanese yen per U.S. dollar. If the inflation rate...
Assume the spot exchange rate is 106.90 Japanese yen per U.S. dollar. If the inflation rate in the U.S. is expected to be 2% and the inflation rate in Japan is 1% for the next two years, then the: exchange rate will increase. exchange rate will double. dollar will appreciate relative to the yen. dollar will become more valuable. Yen will strengthen against the dollar.
Section 2 Calculations. 5pt each, 50 pts total. Show your work! Suppose the dollar-pound exchange rate...
Section 2 Calculations. 5pt each, 50 pts total. Show your work! Suppose the dollar-pound exchange rate is quoted as $1.551 = £1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥119. What is the cross exchange rate, £ /¥? Round to 4 decimal places. Suppose the dealer provides this spot rate quote: S($|£) 1.8515 – 04. If you were to buy $1,000,000 worth of British pounds and then sell them five minutes later. Calculate the dealer profit in...
If the spot exchange rate is 0.62 euro per Canadian dollar and the three-month forward rate...
If the spot exchange rate is 0.62 euro per Canadian dollar and the three-month forward rate is 0.60 euro per Canadian dollar, then the ________ on the Canadian dollar in percentage (at an annual rate) is roughly ________. Select one: a. forward premium, 3.226% b. forward premium, 12.90% c. forward discount, 12.90% d. forward discount, 3.226% The 1-year interest rates on Canadian dollar and U.K. pound are 2 % and 5 % respectively. If the current spot rate is 2...
The following rates exist: Current spot exchange rate: $1.80/£ Annualized interest rate on 90-day dollar-denominated bonds:...
The following rates exist: Current spot exchange rate: $1.80/£ Annualized interest rate on 90-day dollar-denominated bonds: 8% (2% for 90 days) Annualized interest rate on 90-day pound-denominated bonds: 12% (3% for 90 days) Financial investors expect the spot exchange rate to be $1.77/£ in 90 days. Calculate the expected premium or discount on the pound What would you expect the 90-day expected spot exchange rate to be under uncovered interest rate parity conditions using the approximate UIRP (i.e., the investor...
3. Trading in foreign exchange What are spot rates and forward rates? Purple Panda Importers, a...
3. Trading in foreign exchange What are spot rates and forward rates? Purple Panda Importers, a U.S. company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for ¥689 million, but the Japanese firm has 60 days before it must make the payment to Purple Panda Importers The spot exchange rate is ¥128.75 per dollar, and the 60-day forward rate is ¥133.45 per dollar. Is the yen selling at a premium or at...
The spot rate between the Japanese yen and the U.S. dollar is ¥106.31/$, while the one-year...
The spot rate between the Japanese yen and the U.S. dollar is ¥106.31/$, while the one-year forward rate is ¥105.53/$. The one-year risk-free rate in the U.S. is 2.31 percent. If interest rate parity exists, what is the one-year risk-free rate in Japan? Select one: a. 2.68% b. 1.56% c. 2.87% d. 1.39% e. 3.07%
The spot rate between the U.S. dollar and the New Zealand dollar is $1 = NZD1.3362....
The spot rate between the U.S. dollar and the New Zealand dollar is $1 = NZD1.3362. Assume the interest rate in the United States is 8 percent and in New Zealand is 4 percent. What should be the 3-month forward exchange rate? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Suppose the spot exchange rate for the Canadian dollar is Can$1.04 and the six-month forward rate...
Suppose the spot exchange rate for the Canadian dollar is Can$1.04 and the six-month forward rate is Can$1.06.    a. Which is worth more, a U.S. dollar or a Canadian dollar?    Canadian dollar U.S. dollar    b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.69? (Enter your answer as directed, but do not round intermediate calculations. Round your answer to 2 decimal places, e.g.,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT