The current U.S. dollar-yen spot rate is 125¥/$. If the 90-day forward exchange rate is 127 ¥/$ then the yen is selling forward at a per annum _ (premium or discount?) of ___% (what percentage?).

Since the same amount, in dollars, would buy you more yen at the 90-day forward rate then at the current date, the yen is selling forward at a discount. The discount per annum is given by:

[tex]D=\frac{127-125}{127}*4 =0.063=6.3\%[/tex]

The yen is selling forward at a per annum discount of 6.3%

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lazicah lazicah · Answer 2 · 2020-03-19T03:32:43+01:00

lazicah lazicah

19-03-2020

Answer:

Discount ; 6.3%

Explanation:

percentage = (127-125)/127 × 4 = 0.063 × 100% = 6.3%

The yen is selling forward at a discount. Because the same amount, in dollars, would buy you more yen at the 90-day forward rate

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The current U.S. dollar-yen spot rate is 125¥/$. If the 90-day forward exchange rate is 127 ¥/$ then the yen is selling forward at a per annum _________ (premium or discount?) of ___________% (what percentage?).

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The current U.S. dollar-yen spot rate is 125¥/$. If the 90-day forward exchange rate is 127 ¥/$ then the yen is selling forward at a per annum _ (premium or discount?) of ___% (what percentage?).