Suppose that the spot exchange rate for the Japanese yen is 116/$. At the same time, the

Question:

Suppose that the spot exchange rate for the Japanese yen is ¥116/$. At the same time, the one-year interest rate in the United States is 4.85% and the one-year interest rate in Japan is 0.10%. Based on these rates, what forward exchange rate is consistent with no arbitrage?

Fantastic news! We've Found the answer you've been seeking!