Question: Using Exhibit 5.4, calculate the one-, three-, and six-month forward premium or discount for the Japanese yen versus the U.S. each month has 30 days.

Using Exhibit 5.4, calculate the one-, three-, and six-month forward premium

Using Exhibit 5.4, calculate the one-, three-, and six-month forward premium or discount for the Japanese yen versus the U.S. each month has 30 days. What is the interpretation of your results? EXHIBIT 5.4 Exchange Rates dollar using American term quotations. For simplicity, assume Currencies May 16, 2016 U.S.-dollar foreign-exchange rates in late New York trading Country/currency Thailand baht Vietnam dong 02832 00004500 Per US$ 35.420 22220 Country/currency in US$ Per US$ Americas 0708 2856 7755 001440 000330 04186 1520 23.889 6.5795 na 3.5014 1.2895 694.28 3028.50 real Canada dollar Chile peso Colombia peso Ecuador US dollar 8833 8825 8808 Euro area euro 1-mos forward 3-mos forward 6-mos forward .1353 1.1389 003593 1224 18.306 Hungary forint 278.30 rone 3.8915 65.482 8.2610 9776 03242 100125 30.8450 9.9875 Venezuela b. fuerte 01527 1211 1.0229 1.0242 1.0270 1.0318 Asia-Pacific rona Switzerland frand Australian dollar 1-mos forward 3-mos forward 6-mos forward yuan Hong Kong dollar 1.3737 1.3767 orward 3-mos forward 6-mos forward 7264 6.5205 7.7637 66.805 13310 109.03 108.94 108.72 108.34 9692 2.9667 6944 6943 6941 6937 1.4402 1.4403 UK 1-mos forward 3-mos forward 6-mos forward 01497 0000751 009172 009179 009198 009230 2483 6759 00956 ru rupiah 1-mos forward 3-mos forward 6-mos forward Malaysia ringgit Middle East/Africa 2.6523 1133 gypt pound Israel shekel Jordan dinar 8.8298 3.8210 New Zealand dollar Pakistan rupee 1.4097 3.3141 0006636 2666 104.60 3017 1507.00 3.7503 15.3900 .6729 Philippines peso .7302 0008477 03064 1.3695 179.66 32.642 Saudi Arabia riyal South Africa rand UAE dirham South Korea won 2723 Sources: Compiled from Bloomberg data, May 16, 2016, and from using the OANDA online currency converter at www.oanda.com

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