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The Current Exchange Rate between Japan and U.K. is One British Pound Equals 120 Japanese Yen. The one year Annual Interest Rate in Japan is 1%, while the Annual Interest Rate in U.K. is 3% . Given

The Current Exchange Rate between Japan and U.K. is One British Pound Equals 120 Japanese Yen. The one year Annual Interest Rate in Japan is 1%, while the Annual Interest Rate in U.K. is 3% . Given this, what would you expect the Forward Rate to be between Japanese Yen and British Pounds, one year from now? Explain your steps.

If details can be given on each step it would be appreciated. I am lost as to how to calculate the forward rate.

 

Aug 23 2021 View more View Less

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