Question
You have just started working as a trader for Credit Suisse in New York. The following are quotes for Japanese (JPY) against the dollar (USD)
You have just started working as a trader for Credit Suisse in New York. The following are quotes for Japanese (JPY) against the dollar (USD) for spot, 1 month forward, 3 months forward, 6 months forward and one year forward. All the rates are quoted as the number of JPY per USD.
Spot exchange rate: The bid rate is 128.02 JPY per USD Ask Rate is 128.06 JPY per USD
Forward points: 1 month forward 12 - 09 3 months forward 46 - 41 6 months forward 102 - 92 1 year forward 204 - 184
Q 1 & Q 2 combined: A customer TBI International inc calls you and asks you for the exchange rate at which they can sell to you 500 Mio JPY for delivery 3 months forward.
Q 1: What exchange rate do you quote? Give your answer to 2 decimal places.
Q 2: How much USD will the customer TBI International inc receive in 3 months' time in exchange for the 500 Mio JPY? Give your answer to the nearest USD.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started