Question
Purple Panda Importers, a U.S. company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for 675 million,
Purple Panda Importers, a U.S. company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for 675 million, but the Japanese firm has 60 days before it must make the payment to Purple Panda Importers The spot exchange rate is 127.50 per dollar, and the 60-day forward rate is 132.10 per dollar. Is the yen selling at a premium or at a discount in the forward market relative to the U.S. dollar?
In the forward market, the yen is trading at a premium.
The yen is trading at a discount in the forward market.
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