Pricing forward contracts - example in financialexamhelp123

CFA Level II Portfolio Management
#1

There are two examples in the explanation of pricing forward contracts on financialexamhelp123

http://financialexamhelp123.com/pricing-currency-forwards/

The 2 examples explain how to take advantage of arbitrage opportunities related to mispricing of forward exchange rates JPY/USD.

It looks like regardless of whether the JPY is under or overpriced, I short the forward contract (sell dollars and receive JPY). Is that right or am I missing something? Do I ever go long the contract?

Thanks!

#2

What you’ve discovered is . . . a typo.

I fixed it.

Sorry about that.

#3

Too bad. I had “short no matter what” down pat. Thanks for updating.