Question

If you are a Japanese producer who sells products in the US, you want a foreign exchange future without going through the futures market. So, you borrow money in dollars with an interest rate of 5% and immediately convert it to yen at a rate of 1 dollar to 100 yen. Then you put the money in a Japanese interest-bearing account with an interest rate of 10%. What is the forward exchange rate in this case? a) 94.88 yen to dollars b) 95.45 yen to dollars c) 105.12 yen to dollars d)104.76 yen to dollars

Answer 1

Answer:

104.76

Explanation:

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