Suppose that you borrow ¥100 million today. Assume that the current spot rate is
¥120/$ and that the 12
months forward rate (F¥/$) is F¥/$ = ¥119/$. Also, the 12-
month interest rate on a Yen deposit is 0.4% and on a US dollar deposit is 6%.
Discuss if there exists a riskless opportunity and if so how you can exploit the