Your company can get yen loans for 2.0%.Dollar rates on the same loans are 4.5%.The spot yen per dollar exchange rate is 104.The forward rates for years 1 thru 4 are,101.51,99.08,96.71,and 94.40,respectively.What is the dollar value of a 4-year 1 million yen loan?
A) $9,615.33
B) $10,422.46
C) $11,618.04
D) $13,527.89

Question

Quizplus · Accepted Answer

The dollar value of a 4-year 1 million yen loan is $9,615.33. This is calculated by multiplying the yen amount by the spot exchange rate and then dividing by the forward rate for year 4.

Your Company Can Get Yen Loans for 2