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Consider the following forward contract: In 18 months, you will trade 1 million Yen at a price F. a) Construct one synthetic for selling the
Consider the following forward contract: In 18 months, you will trade 1 million Yen at a price F. a) Construct one synthetic for selling the yen forward. b) Suppose the spot price is 104. The USD interest rates for all relevant loans equal 3.3%, and the Japanese equivalents equal 0.1%. Calculate the equilibrium F. c)If F=102, do you buy or sell dollars in the forward contract? Do you buy or sell dollars using a synthetic
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