A U S investor holds a portfolio of Japanese stocks worth 160 million The spot exchange rate is 158 $, and the three month forward exchange rate is 160 S The investor fears that the Japanese yen will depreciate in the next month but wants to keep the Japanese stocks What position can the investor t...

To lock in the rate at which yen can be converted into US dol ...

A U.S. investor holds a portfolio of Japanese stocks worth 160 million. The spot exchange rate is

Question:

A U.S. investor holds a of Japanese worth ¥160 million. The spot is ¥158/$, and the three-month forward is ¥160/S. The investor fears that the Japanese yen will depreciate in the next month but wants to keep the Japanese What position can the investor take based on three-month forward contracts? List all the factors that will make the hedge imperfect.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...