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The current fiveyear JPY interest rate is 6 % per annum ( compounded annually ) . The fiveyear Eurodollar interest rate is 8 . 5

The current fiveyear JPY interest rate is

6 %

per annum

(

compounded annually

) .

The fiveyear Eurodollar interest rate is

8.5 % .

What is the implied forward premium or discount of the yen

(

over the current spot rate

)

for a fiveyear forward contract, if IRP holds?

(10 %

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