The bid-ask rates are as follows:
Spot exchange rate:
¥/$ 102.40-48
Interest rates:
One-year interest rate in ¥ 1¹/₂ - ⁵/₈
One-year interest rate in $ 9¹/₈ - ¹/₄
What is the quotation for the one-year ¥/$ forward exchange rate?

Question

Quizplus · Accepted Answer

The Answer is The bid forward exchange rate is:
¥/$

= 102.40 \frac { 1 + 1.5 \% } { 1 + 9.25 \% } = 95.1359

The ask forward exchange rate is:
¥/$

= 102.48 \frac { 1 + 1.625 \% } { 1 + 9.125 \% } = 95.4367

Therefore, the quotation for the one-year ¥/$ forward exchange rate is 95.1359-95.4367.

The Bid-Ask Rates Are as Follows