Question
A Japanese company has payables of EUR 500,000, due in three months. The current JPY/EUR exchange rate is 129.85-131.47, the Japanese interest rate is
A Japanese company has payables of EUR 500,000, due in three months. The current JPY/EUR exchange rate is 129.85-131.47, the Japanese interest rate is 0.1- 0.3% p.a. and the Euro interest rate is 1.2-1.5% p.a. What is the implicit three-month forward rate achieved via a money market hedge? 131.18 128.06 128.70 130.30
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