Tahia Meyers, the chief accountant of the Black Pearl Jewelry Company in Moorea, French Polynesia, is planning for the tourist high season that will start at the conclusion of the rainy season. She heard a statement by the local Minister of Economic Affairs in which he suggested that the French Polynesian franc could lose up to ten percent of its value in the upcoming six months. Tahia thinks that this might be just rhetoric directed at the French government, but she would like to look more closely at the issue. She knows that the current spot rate is XPF92.15/$ and has calculated the expected spot rate in six months as XPF95.00/$. What is the percent per annum discount or premium on the franc?

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The Answer of Tahia Meyers, the chief accountant of the Black Pearl Jewelry Company in Moorea, French Polynesia, is planning for the tourist high season that will start at the conclusion of the rainy season. She heard a statement by the local Minister of Economic Affairs in which he suggested that the French Polynesian franc could lose up to ten percent of its value in the upcoming six months. Tahia thinks that this might be just rhetoric directed at the French government, but she would like to look more closely at the issue. She knows that the current spot rate is XPF92.15/$ and has calculated the expected spot rate in six months as XPF95.00/$. What is the percent per annum discount or premium on the franc?

Tahia Meyers, the Chief Accountant of the Black Pearl Jewelry