On July 15, 2016, you convert 650,000 U. S. dollars to Japanese yen in the spot foreign exchange market and purchase a six-month forward contract to convert yen into dollars. How much will you receive in U. S. dollars at the end of six months

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