Question
Using Exhibit 5.7, calculate the one-, three-, and six-month forward premium or discount for the Japanese yen versus the U.S. dollar using American term quotations.
Using Exhibit 5.7, calculate the one-, three-, and six-month forward premium or discount for the Japanese yen versus the U.S. dollar using American term quotations. For simplicity, assume each month has 30 days. What is the interpretation of your results?
Note: Round your answers to 5 decimal places.
Exhibit 5.7
Exchange Rates
| Currencies January 31, 2022 | ||
|---|---|---|
| U.S.-dollar foreign-exchange rates in late New York trading | ||
| Country/ Currency | Monday | |
| In US$ | Per US$ | |
| Americas | ||
| Argentina peso | 0.0095 | 105.02 |
| Brazil real | 0.1883 | 5.3102 |
| Canada dollar | 0.7869 | 1.2708 |
| Chile peso | 0.001249 | 800.60 |
| Colombia peso | 0.000254 | 3942.5 |
| Costa Rica colon | 0.001556 | 642.73 |
| Ecuador US dollar | 1 | 1 |
| Mexico peso | 0.0485 | 20.635 |
| Peru new sol | 0.2601 | 3.845 |
| Asia-Pacific | ||
| Australian dollar | 0.7067 | 1.4150 |
| 1-mos forward | 0.7068 | 1.4149 |
| 3-mos forward | 0.7071 | 1.4143 |
| 6-mos forward | 0.7077 | 1.4131 |
| China yuan | 0.1572 | 6.3612 |
| Hong Kong dollar | 0.1283 | 7.7974 |
| India rupee | 0.01340 | 74.622 |
| Indonesia rupiah | 0.0000696 | 14368 |
| Japan yen | 0.00869 | 115.11 |
| 1-mos forward | 0.00869 | 115.09 |
| 3-mos forward | 0.00870 | 114.98 |
| 6-mos forward | 0.00872 | 114.70 |
| Malaysia ringgit | 0.2389 | 4.1855 |
| New Zealand dollar | 0.6576 | 1.5206 |
| Philippines peso | 0.01962 | 50.975 |
| Singapore dollar | 0.7400 | 1.3513 |
| South Korea won | 0.0008268 | 1209.5 |
| Taiwan dollar | 0.03593 | 27.835 |
| Thailand baht | 0.03009 | 33.238 |
| Vietnam dong | 0.00004 | 22649.7 |
| Europe | ||
| Czech Rep. koruna | 0.04616 | 21.666 |
| Denmark krone | 0.1499 | 6.6708 |
| Euro area euro | 1.1235 | 0.8901 |
| 1-mos forward | 1.1241 | 0.8896 |
| 3-mos forward | 1.1260 | 0.8881 |
| 6-mos forward | 1.1299 | 0.8851 |
| Hungary forint | 0.00316 | 316.19 |
| Norway krone | 0.1124 | 8.8963 |
| Poland zloty | 0.24515 | 4.0791 |
| Russia ruble | 0.01293 | 77.312 |
| Sweden krona | 0.1073 | 9.3230 |
| Switzerland franc | 1.0785 | 0.9272 |
| 1-mos forward | 1.0793 | 0.9265 |
| 3-mos forward | 1.0815 | 0.9247 |
| 6-mos forward | 1.0857 | 0.9211 |
| Turkey lira | 0.0752 | 13.304 |
| UK pound | 1.3447 | 0.7437 |
| 1-mos forward | 1.3444 | 0.7438 |
| 3-mos forward | 1.3441 | 0.7440 |
| 6-mos forward | 1.3435 | 0.7443 |
| Middle East/Africa | ||
| Bahrain dinar | 2.6527 | 0.3770 |
| Egypt pound | 0.0636 | 15.722 |
| Israel shekel | 0.3159 | 3.1653 |
| Jordan dinar | 1.4105 | 0.7090 |
| Kuwait dinar | 3.3002 | 0.3030 |
| Nigeria naira | 0.00241 | 415.26 |
| Saudi Arabia riyal | 0.2665 | 3.7519 |
| South Africa rand | 0.0650 | 15.387 |
| UAE dirham | 0.2723 | 3.6730 |
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Principles Of Finance With Excel
Authors: Simon Benninga
1st Edition
0195301501, 978-0195301502
