If the yen is selling at a premium relative to the euro in the forward market, is the forward price of EUR per JPY larger or smaller than the spot price of EUR per JPY?

Respuesta :

Answer:

The forward price of EUR per JPY will be LARGER

Explanation:

Based on the information in a situation where yen is selling at a premium which is an additional amount charged in the forward market, it means that forward price of EUR per JPY which is the price that has been negotiated and agreed upon will be LARGER than the spot price of EUR/JPY which is the market current price to be traded on the spot.

Therefore The forward price of EUR per JPY will be LARGER.