Asked by
LeRhonda Mundy
on Dec 02, 2024
Verified
If the spot rate for Japanese Yen is $.00703 and the 6 month forward rate is $.00717, then the forward Yen is trading at a(n) :
A) expected gain.
B) premium.
C) Reciprocal.
D) discount.
Forward Rate
The agreed-upon price for a financial transaction that will occur at a future date, as in currency or interest rate swaps.
Spot Rate
The current exchange rate at which a currency can be bought or sold for immediate delivery.
Premium
The amount paid for an insurance policy or the price above the nominal or face value of a security or investment.
- Gain an understanding of the fundamentals of spot and forward exchange rates, and their influence on international commerce and investment.
- Explain the concept of currency valuation and determinants such as demand and supply, and economic indicators.
Verified Answer
JS
Learning Objectives
- Gain an understanding of the fundamentals of spot and forward exchange rates, and their influence on international commerce and investment.
- Explain the concept of currency valuation and determinants such as demand and supply, and economic indicators.