Schweser Book 5 - Exam 2 AM - Question 39

CFA Level II Economics
#1

Quick question for everyone. In the question, we are looking for the FWD discount/premium for the JPY against the USD. I don’t think I have come across this terminology. The problem gives the FX rate of JPY/USD: 120. I would read this as 120JPY per Dollar. Is this the same thing as “JPY against the USD”?

If the quote is given as USD:JPY=120, the FWD premium/discount will be for USD and the JPY will be the opposite.

…needless to say I got it wrong…wasn’t sure how to interpret JPY against USD.

#2

JPY / USD: 120 is the same as saying 120 jpy for 1 USD

USD:JPY = 120 is the same as saying 120 jpy for 1 USD

if it is written 120 JPY against the USD is the same as saying 120 jpy for 1 USD

against the is more utilize in a sentence like JPY as weaken _ against the _ USD ( meaning that JPY / USD move from 120 to a hihger number )

#3

Thanks!!