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Currency Forward Prices

Suppose the current exchange rate between Germany and Japan is 0.02?/¥. The euro-denominated annual continuously compounded risk-free rate is 4% and the yen-denominated annual continuously compounded risk-free rate is 1%. What are the 6-month euro/yen and yen/euro forwarded prices?

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Forward Prices
Suppose the current exchange rate between Germany and Japan is 0.02?/¥.  The euro-denominated annual continuously compounded risk-free rate is 4% and the yen-denominated annual ...

Solution Summary

The 6-month euro/yen and yen/euro forwarded prices are calculated, given euro-denominated annual continuously compounded risk-free rate and the yen-denominated annual continuously compounded risk-free rate.

$2.19