The current five-year Euro yen rate is 6% per annum compounded annually.The five-year Eurodollar rate is 8.5%.What is the implied forward premium or discount of the yen over the current spot rate for a five-year forward contract?
A) 4.17% premium
B) 18.46% discount
C) 11.00% discount
D) 12.36% premium
Correct Answer:
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