Calculate the future exchange rate between yen and us dollar


Problem

Suppose that you are an operator who works in an investment bank and you need to close on a strategy based on the future market of the yen for the next 3 months. You know that a Japanese government bond with a 3-month maturity is being negotiated at a rate of 0.004% and that the rate for Canadian bonds with the same maturity is 2.811%. The spot exchange rate between the Canadian dollar and the American dollar is 1.5054 C$/US$. The exchange rate between the yen and the American dollar is 118 f/US$. Suppose that the future exchange rate for 3 months is 1.2032 C$/US$. Calculate the future exchange rate between the yen and the American dollar for 3 months.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Calculate the future exchange rate between yen and us dollar
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