Assume the following information: Spot : USD/JPY 105-106 - U.S. dollar depositing rate : 6% - U.S.
Question:
Assume the following information:
Spot : USD/JPY 105-106
- U.S. dollar depositing rate : 6%
- U.S. dollar borrowing rate : 6.5%
- Japanese Yen depositing rate : 3%
- Japanese Yen borrowing rate : 3.25%
Assume that : 360 days in a year. 1 month has 30 days.
a./ An American exporter will receive JPY-denominated payment in one year. What will be the number of JPY it will have to deliver to bank in exchange for each dollar he/ she will receive?
b./ An American importer will have to make a payment in Japanese Yen in one year. What is the forward price quoted to the importer?
c/. The company -US based conduct - will pay JPY 1M in next 6 months. Caculate the amount of USD that the company will pay in 6 month. Note: The hedging by signing forward contract.
d/ If the the bank take 2% fee from the question C. What is the new forward rate.