What is the cost-of-carry forward price

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Your firm is looking to take a long position on one Japanese yen/U.S. dollar forward contract. The contract called for delivery of ¥1 billion at the end of April 2022 (six months from now). The spot exchange rate is ¥118.35/USD, six-month interest rates in the U.S. are 0.24%, and six-month rates in Japan are 0.86% (both continuously compounded). Assume that you can borrow and/or lend at the corresponding rates in each currency. Also, assume no credit risk.

What is the cost-of-carry forward price on the forward contract? Round your answer to the nearest 0.01 (e.g. 5.2353 would be 5.24).

Reference no: EM133070250

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