If the spot rate is $0.50/NZ$ and the forward rate is $0.55/NZ$. The interest rate in USA is 9% and the interest rate in New Zealand is 4%. What would be per dollar benefit for the US investor from investing in New Zealand bonds? a. $0.054 b. -$ 0.054 c. $0.090 d. $0.040
If the spot rate is $0.50/NZ$ and the forward rate is $0.55/NZ$. The interest rate in USA is 9% and the interest rate in New Zealand is 4%. What would be per dollar benefit for the US investor from investing in New Zealand bonds? a. $0.054 b. -$ 0.054 c. $0.090 d. $0.040
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![If the spot rate is $0.50/NZ$ and the forward rate is $0.55/NZ$. The interest rate in USA
is 9% and the interest rate in New Zealand is 4%. What would be per dollar benefit for the
US investor from investing in New Zealand bonds?
a. $0.054
b. -$ 0.054
c. $0.090
d. $ 0.040](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68b0c046-b587-4d65-a874-720729de254d%2F18c4c5f3-f211-4601-832b-423f51919f59%2Frjketod_processed.png&w=3840&q=75)
Transcribed Image Text:If the spot rate is $0.50/NZ$ and the forward rate is $0.55/NZ$. The interest rate in USA
is 9% and the interest rate in New Zealand is 4%. What would be per dollar benefit for the
US investor from investing in New Zealand bonds?
a. $0.054
b. -$ 0.054
c. $0.090
d. $ 0.040
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