A man needs ¥50 million in 2 months for a 8-month period to finance a sushi restaurant in City Z. He wants to lock in the rate for a Euro yen loan over the borrowing period today. The current 2-month annualized Euro yen loan rate is 6.3% and the 10-month annualized Euro yen loan rate is 7.245%. What is the interest rate (annualized) the man can lock in based on these rates through money market transactions? Suppose the Bank of Hero Association offers a forward forward that fixes the loan rate at 6.1695942602672%, should the man take this contract?
Select one or more: 

a. 7.404% 

b. 7.055% 

c. 1.333

d. 4.936%

e. Yes, the man should go for the forward forward contract with the Bank of Hero Association 

f. No, the man should lock in a rate through money market transactions 

g. Not enough informationrn

Answer rating: 100% (QA)

Option F ie No the man should lock in a rate through money market transaction Base ... View the full answer