Answer :
Answer:
The question is not complete:
On July 15, 2016, you convert 650,000 U.S. dollars to Japanese yen in the spot foreign exchange market (¥104.91/$) and purchase a six-month forward contract ($0.0095320/¥1) to convert yen into dollars. How much will you receive in U.S. dollars at the end of six months? (Round your answer to 2 decimal places. (e.g., 32.16))
The sum of $650,001.38 would be received in six months
Explanation:
In the first place by buying the yen in the spot market on July 15 ,2016, the amount of yen is computed thus:
$650,000 was at (¥104.91/$) ,which implies that each $ was exchanged for ¥104.91
yen received =$650,000*104.91/1
= ¥ 68,191,500.00
The six month forward contract outcome is as follows:
($0.0095320/¥1)
each Yen was exchanged $0.0095320
dollars received= ¥ 68,191,500.00 *0.0095320/1
=$650,001.38