The Current Exchange Rate between Japan and U.K. is One British Pound Equals 150 Japanese Yen. The one year Annual Interest Rate in Japan is 1%, while the Annual Interest Rate in U.K. is 4%.
Given this, what would you expect the Forward Rate to be between Japanese Yen and British Pounds, one year from now?© BrainMass Inc. brainmass.com June 4, 2020, 3:03 am ad1c9bdddf
Spot rate of one British Pound=150 Japanese Yen
Annual Interest rate in Japan=1%
Annual Interest rate in UK=4%
Forward Rate = Spot Rate*(1 + Interest Rate of Japan)/(1 + Interest Rate of UK)
Solution describes the steps to calculate the forward rate between the two given currencies, one year from now.