Using Exhibit 5.7, calculate the one-, three-, and six-month forward premium or discount for the Japanese yen
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. For simplicity, assume each month has 30 days. What is the interpretation of your results?
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EXHIBIT 5.7 Currencies April 3, 2019 U.S.-dollar foreign-exchange rates in late New York trading Country/Currency Americas Argentina peso Brazil real Canada dollar Chile peso Colombia peso Ecuador US dollar Mexico peso Peru new sol Uruguay peso Asia-Pacific Australian dollar 1-mos forward 3-mos forward 6-mos forward China yuan Hong Kong dollar India rupee Indonesia rupiah Japan yen 1-mos forward 3-mos forward 6-mos forward Malaysia ringgit New Zealand dollar Exchange Rates Pakistan rupee Philippines peso Singapore dollar South Korea won Taiwan dollar In US$ - 0233 2583 .7493 .001500 .000320 1 .0520 .3034 .02965 .7113 .7117 .7125 .7139 .1490 .1274 .01461 .0000703 .00897 .00899 .00903 .00910 2452 .6778 .00709 .0192 .7387 .0008814 .03246 Wed Per US$ 42.854 3.8715 1.3345 666.73 3123.6 1 19.220 3.296 33.4300 1.4060 1.4051 1.4035 1.4008 6.7114 7.8494 68.425 14223 111.49 111.22 110.70 109.90 4.0790 1.4753 140.47 52.124 1.3537 1134.5 30.812 Country/Currency Thailand baht Vietnam dong Europe Czech Rep. koruna Denmark krone Euro area euro 1-mos forward 3-mos forward 6-mos forward Hungary forint Norway krone Poland zloty Russia ruble Sweden krona Switzerland franc 1-mos forward 3-mos forward 6-mos forward Turkey lira UK pound 1-mos forward 3-mos forward 6-mos forward Middle East/Africa Bahrain dinar Egypt pound Israel shekel Jordan dinar Kuwait dinar Lebanon pound Saudi Arabia riyal South Africa rand UAE dirham In US$ .03150 .00004 .04372 .1505 1.1233 1.1262 1.1319 1.1407 .00351 .1167 .2619 .01533 .1079 1.0018 1.0047 1.0104 1.0193 .1778 1.3158 1.3180 1.3218 1.3277 2.6526 .0577 2777 1.4104 3.2854 .00066 .2666 .0707 2723 Wed Per US$ 31.748 23146.3 22.874 6.6457 .8903 .8880 .8835 .8767 284.71 8.5728 3.8183 65.241 9.2695 .9982 .9953 .9897 .9811 5.6248 .7600 .7588 .7565 .7532 .3770 17.325 3.6016 .7090 .3044 1507.50 3.7504 14.146 3.6730
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