TABLE 5.1 Use the table to answer following question(s). Yen: Spot and Forward M
ID: 2810097 • Letter: T
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TABLE 5.1 Use the table to answer following question(s). Yen: Spot and Forward Mid Rates Bid Pound: Spot and Forward (S/) Ask 1.4487 Ask Mid Rates Bid Spot Forward Rates 1 month 6 months Swaps 2 year 3 year 129.87 129.82 129.92 1.4484 1.4481 129.68 128.53 -20 136 -18 132 1.4459 1.4327 -26 160 -24 -154 117.65 115.50 1232 1212 1452 1422 1.4250 1.4225 238 -265 230 253 Refer to Table 5.1. According to the information provided in the table, the 6-month yen is selling at a forward mid rates to make your calculations.) of approximatelv per annum. (Use the discount; 2.06% premium; 2.06% premium; 2.09% discount 2.09%Explanation / Answer
spot rate , s = 129.87
forward rate , f ( 6-month) = 128.53
since f < s , 6-month yen is selling at a forward discount
forward discount =( (s-f)/s)*(12/no. of months)*100 = ((129.87 - 128.53 )/129.87)*(12/6)*100 = 2.06%
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