What is the cross-rate in terms of yen per pound

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Suppose the Japanese yen spot exchange rate is 118 yen = $1.00, and the British pound spot exchange rate is 1 pound = $1.81.

Question 1: What is the cross-rate in terms of yen per pound?

Question 2: Assume that U.S. six-month Treasury bills have an annualized rate of 6.2% while default-free Japanese bonds that mature in six months have an annualized rate of 5.0% and that interest rate parity holds. Find the six-month forward exchange rate in terms of dollars per yen.

 

Reference no: EM13266029

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