Problem
The following are quotes for Japanese (JPY) against the dollar (USD) for spot, 1 month forward, 3 months forward, 6 months forward and one year forward. All the rates are quoted as the number of JPY per USD.
Spot exchange rate:
Bid rate 128.02 JPY per USD
Ask rate 128.06 JPY per USD
Forward points:
1 month forward 12 - 09
3 month forward 46 - 41
6 month forward 102 - 92
1 year forward 204 - 184
A customer calls you and ask you for the exchange rate at which they can sell to you 500 mio JPY for delivery 3 months forward. What exchange rate do you quote? Give your answer to 2 decimal places.
How many USD will the customer TBI International inc receive in 3 months time in exchange for the 500 mio JPY. Give your answer to the nearest USD.
A different customer, calls you and ask you for the exchange rate at which they can sell to you 2 mio USD for delivery 6 months forward.
What exchange rate do you quote? Give your answer to 2 decimal places.
How many JPY will the customer, Wallaby Exports, receive in 6 months time in exchange for the 2 mio USD. Give your answer to the nearest JPY.