The JPY/AUD spot exchange rate is 82.42. The JPY interest rate is 0.15%, and the AUD interest rate is 4.95%. If the interest rates are quoted on the basis of a 360-day year, the 90-day forward points in JPY/AUD would be closest to:

A. –377.0
B. –97.7
C. 98.9

Question

28-05-2025
Business

College

Thank you for visiting The JPY AUD spot exchange rate is 82 42 The JPY interest rate is 0 15 and the AUD interest rate is 4 95 If. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!

The JPY/AUD spot exchange rate is 82.42. The JPY interest rate is 0.15%, and the AUD interest rate is 4.95%. If the interest rates are quoted on the basis of a 360-day year, the 90-day forward points in JPY/AUD would be closest to:

A. –377.0
B. –97.7
C. 98.9

Answer :

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Final answer:

The forward points for the JPY/AUD exchange rate over a 90-day period, given the interest rates and spot exchange rate, are approximated to be -97.7. This suggests the JPY is expected to depreciate relative to the AUD over this time.

Explanation:

The question is asking for the calculation of the expected 90-day forward points in JPY/AUD. The forward points can be calculated using the formula: Forward Points = Spot Exchange Rate x ((1 + foreign interest rate) / (1 + home interest rate) - 1) x (Days/360).

Substituting the given values into the formula; Spot rate = 82.42, JPY rate = 0.15% or 0.0015, AUD rate = 4.95% or 0.0495, we have Forward Points = 82.42 x ((1 + 0.0015) / (1 + 0.0495) - 1) x (90/360).

Doing the calculation, the forward points come out to be roughly -97.7, so the closest answer choice would be B. -97.7. The negative forward points indicate an expected depreciation of the JPY relative to the AUD over the 90-day period.

Learn more about Foreign Exchange Forward Points here:

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The JPY/AUD spot exchange rate is 82.42. The JPY interest rate is 0.15%, and the AUD interest rate is 4.95%. If the interest rates are quoted on the basis of a 360-day year, the 90-day forward points in JPY/AUD would be closest to:A. –377.0B. –97.7C. 98.9

Answer :

Final answer:

Explanation:

Learn more about Foreign Exchange Forward Points here:

Other Questions

The JPY/AUD spot exchange rate is 82.42. The JPY interest rate is 0.15%, and the AUD interest rate is 4.95%. If the interest rates are quoted on the basis of a 360-day year, the 90-day forward points in JPY/AUD would be closest to:

A. –377.0
B. –97.7
C. 98.9