What is the month forward exchange rate

Assignment Help Financial Management

Reference no: EM13850083

Interest rate parity

Six-month T-bills have a nominal rate of 5%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 3%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate? Round your answer to five decimal places.

Reference no: EM13850083

Questions Cloud

About the leveraging effect : Which of the following is true about the leveraging effect?

Write article microorganisms and nutrients : Write a two page paper in which you summarize and reflect on this very important article that was one of the first to point out the magnitude of nutrients stored in microorganisms.

Results of changes in the exchange rate : Early in September 1983, it took 260 Japanese yen to equal $1. Nearly 28 years later, in August 2011, that exchange rate had fallen to 110 yen to $1. What would the dollar price of the automobile be in August 2011, again assuming that the car's price..

Determine the bias condition for the circuit : Determine the bias condition for the circuit - I am confused how to establish Vgs

What is the month forward exchange rate : Six-month T-bills have a nominal rate of 5%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 3%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange ra..

Expected to pay the dividends : Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $24, $15, $5.6 and $2.8. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the s..

Travel guidebook from amazon : The Customer receives a Travel Guidebook from Amazon, then reads the book and chooses locations. The Customer also views locations on Google Maps using the Map Program as well as the Earth and Satellite Master files.

What is the current share price-dividends : Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $24, $15, $5.6 and $2.8. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the s..

Market value of equity and debt : Jonah’s Fishery has EBITDA of $67 million. Jonah’s market value of equity and debt is $433 million and $40 million, respectively. Jonah has cash on the balance sheet of $16 million. What is Jonah’s EV ratio?

User Account

All Pages