Question: Please explain specifically with the steps (5 points) On December 23, 2021, spot Japanese yen was sold at 125/$. Suppose the 90-day forward Japanese yen

Please explain specifically with the steps

  1. (5 points) On December 23, 2021, spot Japanese yen was sold at 125/$. Suppose the 90-day forward Japanese yen was selling at a 10% annualized discount, what is the 90-day forward rate of the yen?

  1. (10 points) You see the following quotes in the FX market:

(/) = 130; ($/) = 1.12; and (/$) = 115

Is there any arbitrage profit opportunity? If yes, tell me how you can get the arbitrage profit? And how much profit? Calculate the profit to be made on 100.

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