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One-month forward price for japanese yen

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Reference no: EM13551367

Suppose you entered into a long position of a 2-month Japanese Yen (¥) forward contract at US$0.0094/¥ for 100,000¥. One month after you entered into the forward contract, we have the following quotation:

Spot Rate: US$0.0093/¥
US Dollar Risk Free Rate: APR=3%, compounded continuously
Japanese ¥ Riskfree Rate: APR=2%, compounded continuously

(a) One month after you entered into your forward contract, what would be the "right" one-month forward price for Japanese Yen (¥)

(b) One month after you entered into your forward contract, what would be the value of your forward contract (due in a month for delivery of 100,000 Yen @ US$0.0094/¥)?

Reference no: EM13551367

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