One year forward rate was quoted as usdjpy102 or 102 what


Suppose that on January 1st the annual cost of borrowing in JPY and US dollars are 2% and 7% respectively (Rjpy=2% and RUS=7%). The spot rate of USD on January 1st is USD/JPY110 or 110 ¥ per $. One year forward rate was quoted as USD/JPY102 or 102. What is the USD cost of borrowing in JPY? Or what is the rate of borrowing in USD?

a -5.4%

b 2%

c 10%

d 7%

 

 

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: One year forward rate was quoted as usdjpy102 or 102 what
Reference No:- TGS0606233

Expected delivery within 24 Hours