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Spot yen is 103 yen/$. One year US interest rates are 0.039 and one year Japanese interest rates are 0.019. If there was a futures

Spot yen is 103 yen/$. One year US interest rates are 0.039 and one year Japanese interest rates are 0.019. If there was a futures contract in Japanese yen that matured exactly one year from today.

What $/yen futures price should you expect to find on the exchange?

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SOLUTION To determine the expected yen futures price we can use the interest rate parity IRP conditi... blur-text-image

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