On December 3,2001, spot Japanese yen were sold at $0.008058. Suppose the 180-day forward Japanese yen was selling at a 1.91% annualized premium, what is the 180-day forward rate of the yen?

Question

Quizplus · Accepted Answer

To find the 180-day forward rate, calculate the premium for 180 days: 1.91% annualized premium means 0.955% for 180 days (half-year). Multiply the spot rate by (1 + 0.00955) to get the forward rate: $0.008058 * 1.00955 = $0.008135.

On December 3,2001, Spot Japanese Yen Were Sold at $0