Question;Suppose you entered into a long position of a 2-month Japanese Yen (?) forward contract at US$0.0094/? for 100,000?. One month after you entered into the forward contract, we have the following quotation:Spot Rate: US$0.0093/?US Dollar Risk Free Rate: APR=3%, compounded continuouslyJapanese ? Riskfree Rate: APR=2%, compounded continuously(a) One month after you entered into your forward contract, what would be the ?right? one-month forward price for Japanese Yen (?)(b) One month after you entered into your forward contract, what would be the value of your forward contract (due in a month for delivery of 100,000 Yen @ US$0.0094/?)?
Paper#55853 | Written in 18-Jul-2015Price : $22