The spot yen/US dollar exchange rate is 119.795 yen/$US. The three-month forward rate is 118.397 yen/$US. What is the yen's forward premium (or discount) on the dollar, expressed as an annual percentage?
A) 6.5 percent discount
B) 4.7 percent premium
C) 6.5 percent premium
D) 4.7 percent discount
Correct Answer:
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