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solve for a and b Rina works for Sumitomo Bank in Tokyo. She expects the JPY/USD spot rate will strengthen from 130 to 90 after
solve for a and b
Rina works for Sumitomo Bank in Tokyo. She expects the JPY/USD spot rate will strengthen from 130 to 90 after 180 days. Can she benefit from UIA as a yen carry trade? She has $1 million or the yen equivalent to invest today. Spot rate today is JPY 130/1 USD USD interest rate is 4.5% per annum JPY interest rate is 0.1% Forward rate is JPY 100 / 1USD Expected spot rate in 180 days is 90 A. Where should she borrow and where should she invest? B. Show the rectangle approach with PV and FV for USD and JPY. What is the expected profit or loss Step by Step Solution
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