Interest rate parity-what is six-month forward exchange rate

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Interest rate parity

Six-month T-bills have a nominal rate of 4%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2%. In the spot exchange market, 1 yen equals $0.005. If interest rate parity holds, what is the 6-month forward exchange rate? Round your answer to five decimal places._____

Reference no: EM13848171

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