Given That the Spot Rate Is ¥106

question 28

Multiple Choice

Given that the spot rate is ¥106.74/$ and the 180-day forward quote is ¥100.37/$, we can say that

• A) the U.S. dollar is at a forward premium against the Yen.
• B) the Yen is at a forward premium against the U.S. dollar.
• C) the Yen is at a forward discount against the U.S. dollar.
• D) the U.S. dollar is at neither a premium nor a discount against the Yen.

---

Definitions:

Maturing Obligations

Debts or obligations that are due to be paid within the next accounting period.

Liquidity Ratios

Financial metrics used to measure a company's ability to meet its short-term obligations with its current assets.

Solvency Ratios

Measures of the ability of the company to survive over a long period of time.

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, assets, equity, and other factors.