The Yen Is Currently Trading at *109

question 55

Multiple Choice

The Yen is currently trading at *109.66 per USD, while the forward rate is *112.96 per USD.Given this information, calculate the forward premium or discount.

• A)5.92% premium
• B)2.92% premium
• C)5.92% discount
• D)2.92% discount

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Definitions:

Capital Account Balance

A measure within a country's balance of payments that records all transactions involving the acquisition or disposal of capital assets, such as securities and real estate, between residents and nonresidents.

Legal Tender

Coins and paper money officially declared to be acceptable for the settlement of financial debts.

Car Importer

A company or individual that buys foreign cars and brings them into a country to sell.

Drug Trafficking

The illegal trade involving the cultivation, manufacture, distribution, and sale of substances which are subject to drug prohibition laws.