Forward exchange rate-nominal interest rates on bonds

Reference no: EM1345209

Six-Month T-Bills have a nominal rate of 7 %, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate?

Reference no: EM1345209

Questions Cloud

Net inflows and outflows of foreign currency : Subsidiary A of Mega Corporation has net inflows in Australian dollars of A$1,000,000, while Subsidiary B has net outflows in Australian dollars of A$1,500,000.

Explain how can franchises guarantee its products : Explain how can franchises guarantee its products are appropriate for international markets? Should governments guard its industries by placing tariffs on imported products?

Explain what was the markets reaction : Explain what was the market's reaction to the self-reported earnings announcement and briefly examine the reported earnings per share; what is the company's earnings outlook for the coming year?

Explain which business-level strategy is the facebook using : Explain which business-level strategy is the Facebook using? Explain does this business strategy align with / complement its mission statement and goals

Forward exchange rate-nominal interest rates on bonds : Six-Month T-Bills have a nominal rate of 7 %, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%.

Analysis of a program to reduce air pollution : How would you set up a cost-benefit examine of a program to decrease air pollution in a city? Carefully reflect the items you would include, such as benefits and costs,

Present value of an annuity due : Present value of an annuity due- You inscribed a piece of software that does a better job of allowing computers to network than any other program designed for this purpose.

Export competitiveness by devaluing currency : What is the likely impact of this policy on Asian foreign exchange reserves? On Asian inflation? On Asian export competitiveness? On Asian living standards?

Explain what is your experience in dealing with swot analyse : Deliberate the limitations of SWOT presented in the textbook. How grave are these limitations in the practical application of SWOT analyses? Explain what is your experience in dealing with SWOT analyses? In what means they useful and effective? In ..

User Account

All Pages