The nominal yield on a six-month T bill is 4%, but the fault free Japanese bonds...

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The nominal yield on a six-month T bill is 4%, but the fault free Japanese bonds...

The nominal yield on a six-month T bill is 4%, but the fault free Japanese bonds that mature six months have a nominal rate of 3.5%. In the spot exchange market, one yen equals 0.009. If the interest rate partially holds, what is the six month forward exchange rate?

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Answer 1

Answer #1

1+Interest rate in Foreign currency Fair forward rate Spot rate* 1+Interest rate in home currency Given Spot Rate is 1 Yen = 0.009 So Fair torward rate after 6 months-I0.009( 1 + 4 %* ( 6/12)] / [1 + (3.5962)] = (0.009*1.02) / 1.0175 So Fair forward rate after 6 months is 1 Yen = 0.00902

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Answer 2

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The nominal yield on 6-month T-bills is 4%, while default-free Japanese bonds that mature in 6...

The nominal yield on 6-month T-bills is 5%, while default-free Japanese bonds that mature in 6...

The nominal yield on 6-month T-bills is 7%, while default-free Japanese bonds that mature in 6...

The nominal yield on 6-month T-bills is 7%, while default-free Japanese bonds that mature in 6...

The nominal yield on 6-month T-bills is 5%, while default-free Japanese bonds that mature in 6...

The nominal yield on 6-month T-bills is 5%, while default-free Japanese bonds that mature in 6...

Interest Rate Parity The nominal yield on 6-month T-bills is 8%, while default-free Japanese bonds that...

Problem 17-02 Interest Rate Parity The nominal yield on 6-month T-bills is 6%, while default-free Japanese...

Six month T-bills have a nominal rate of while default-free Japanese bonds that mature in 6...

hello! looking for some help with this one thanks eBook Problem 17-02 Interest Rate Parity La...

The nominal yield on a six-month T bill is 4%, but the fault free Japanese bonds...

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