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b. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency.) Calculate the annual forward premium for all maturities below. Use the Mid-Rate values computed in part a.. (Round to three decimal places.) Period Spot 1 month 2 months Days Forward 0 30 60 Bid Rate \/$ 81.80 81.38 81.20 Ask Rate ¥/$ 81.84 81.42 81.24 Forward Premium 6.192 % %

b. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency.) Calculate the annual forward premium for all maturities below. Use the Mid-Rate values computed in part a.. (Round to three decimal places.) Period Spot 1 month 2 months Days Forward 0 30 60 Bid Rate \/$ 81.80 81.38 81.20 Ask Rate ¥/$ 81.84 81.42 81.24 Forward Premium 6.192 % %

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Japanese Yen Forward. Use the following spot and forward bid-ask rates for the Japanese ven/U.S. dollar (¥/$) exchange rate from September 16. 2010. Period Spot 1 month 2 months 3 months 6 months 12 months 24 months Period Days Forward Spot 1 month 2 months 0 30 60 90 180 360 720 Days Forward 0 30 Bid Rate \/$ 60 81.80 81.38 81.20 80.68 79.49 79.16 78.04 b. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency.) Calculate the annual forward premium for all maturities below. Use the Mid-Rate values computed in part a.. (Round to three decimal places.) Bid Rate \/$ Ask Rate 81.80 81.38 81.20 \/$ 81.84 81.42 81.24 80.72 79.54 79.20 78.08 Ask Rate \/$ Mid-rate \/$ 81.84 81.42 81.24 81.820 81.400 81.220 80.700 79.515 79.180 78.060 Forward Premium 6.192 % % to answer the
Transcribed Image Text:Japanese Yen Forward. Use the following spot and forward bid-ask rates for the Japanese ven/U.S. dollar (¥/$) exchange rate from September 16. 2010. Period Spot 1 month 2 months 3 months 6 months 12 months 24 months Period Days Forward Spot 1 month 2 months 0 30 60 90 180 360 720 Days Forward 0 30 Bid Rate \/$ 60 81.80 81.38 81.20 80.68 79.49 79.16 78.04 b. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency.) Calculate the annual forward premium for all maturities below. Use the Mid-Rate values computed in part a.. (Round to three decimal places.) Bid Rate \/$ Ask Rate 81.80 81.38 81.20 \/$ 81.84 81.42 81.24 80.72 79.54 79.20 78.08 Ask Rate \/$ Mid-rate \/$ 81.84 81.42 81.24 81.820 81.400 81.220 80.700 79.515 79.180 78.060 Forward Premium 6.192 % % to answer the
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