3. Trading in foreign exchange Aa Aa What are spot rates and forward rates? Sweet Dog Manufacturing, a US company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for 658 million, but the Japanese firm has 60 days before it must make the payment to Sweet Dog Manufacturing The spot exchange rate is $129.20 per dollar, and the 60-day forward rate is 134.56 per dollar. Is the yen selling at a premium or at a discount in the forward market relative to the US dollar? In the forward market, the yen is trading at a premium. The yen is trading at a discount in the forward market. If the customer pays Sweet Dog Manufacturing the '658 million today, how much will Sweet Dog Manufacturing receive in dollars? $5.85 million O $6.11 million $6.36 million $5.09 million Assuming that the forward market is correct and the spot exchange rate in 60 days will equal the 60-day forward exchange rate today, Sweet Dog Manufacturing would get more dollars if the Japanese firm paid off its account today in 60 days Flash Player MAC