Question
Can you please provide the step-by-step process to obtain the correct answer for the below question. The correct answer is +137.59, however I do not
Can you please provide the step-by-step process to obtain the correct answer for the below question.
The correct answer is +137.59, however I do not know how the answer was obtained. Thanks
A European client that was due to paying JPY 20 million held a forward contract to hedge a JPY 20 million contract, which has been delayed by one year. The client decided to enter into an FX swap to roll forward the position. The EUR/JPY rate on the original FX forward expiry date was 119.30. The forward rate in one year is 119.10. The interest rate in Europe is 0.50% while the interest rate in Japan is 0.25%. Calculate the total benefit or cost of this FX swap.
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