Use the information below to answer the following questions. Suppose interest rate parity holds, and the current risk-free rate in the United States is 5 percent per six months. Use the approximate interest rate parity condition to answer this question.What must the six-month risk-free rate be in Australia? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate %What must the six-month risk-free rate be in Japan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate %What must the six-month risk-free rate be in Great Britain? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate % Currency per U.S. $ Australia dollar 1.2374 6-months forward 1.2359 Japan yen 100.3000 6-months forward 100.0800 U.K. pound .6795 6-months forward .6778
Use the information below to answer the following questions.
Suppose interest rate parity holds, and the current risk-free rate in the United States is 5 percent per six months. Use the approximate interest rate parity condition to answer this question.What must the six-month risk-free rate be in Australia? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate %What must the six-month risk-free rate be in Japan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate %What must the six-month risk-free rate be in Great Britain? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Risk-free rate %
|
|
Currency per U.S. $ |
|
Australia dollar |
1.2374 |
|
6-months forward |
1.2359 |
|
Japan yen |
100.3000 |
|
6-months forward |
100.0800 |
|
U.K. pound |
.6795 |
|
6-months forward |
.6778 |
|
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|
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