The current five-year yen and dollar interest rates are 8% and 12.5% per annum, respectively. What...

Question

Question

The current five-year yen and dollar interest rates are 8% and 12.5% per annum, respectively. What is the implied forward pre

Answer 1

Answer #1

Implied forward premium:

= (1+12.5%)/(1+8%)-1

= 4.17%

Hence, correct option is c. 4.17% premium

*Please rate thumbs up

Answer 2

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