The following are quotes for Japanese (JPY) against the dollar (USD) for spot, 1 month forward, 3
Question:
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:
Bid rate 128.02 JPY per USD
Ask rate 128.06 JPY per USD
Forward points:
1 month forward 12 - 09
3 month forward 46 - 41
6 month forward 102 - 92
1 year forward 204 - 184
Q 1 & Q 2 combined: A customer TBI International inc calls you and ask 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 many 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.
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale