Use Figure 31.1 to answer the following questions. Suppose interest rate parity holds, and the current sixmonth
Question:
Use Figure 31.1 to answer the following questions. Suppose interest rate parity holds, and the current sixmonth risk-free rate in the United States is 2.3 percent. What must the six-month risk-free rate be in Great Britain? In Japan? In Switzerland?
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Currency per USD USD USD Currency Countryicurrency equiv Countrylcurrency equiv per USD Americas Europe Czech Rep. koruna Argentina peso Brazil real 0358 27.9173 04545 22 2582 3.873 Denmark krone .1577 6.3431 Canada dollar 7628 .C01537 1.311 Euro area euro Hungary forint Norway krone Poland zloty Romania leu 1.1733 8523 Chile peso 650.60 00363135 275.38 Ecuador US dollar 1 .1246 8.0244 Mexico peso 0521 19.2036 .2725 3.6701 3.9653 Uruguay peso Venezuela bolivar .03187 31.38 2522 00000871 114855.0001 Russia ruble 01602 62.414 Sweden krona .1146 8.7241 Switzerland franc 1.0086 9915 Asia-Pacific Australlan do lar 1 month 7467 1.3392 1.0104 9897 1 month 3 month 7464 1.3397 3 month 1.0156 9846 6 month Turkey lira U.K. pound 1 month 3 month 7464 1.3397 1.0249 .9757 6 month China yuan Hong Kong dollar India rupee Indonesia rupiah Japan yen 1 month 3 month 6 month Malaysia ringgit New Zealand dollar 7469 1.3389 2112 4,7342 1511 6.6161 1.3258 7543 1274 7.8485 1.3284 7528 01457 68.6567 1.3319 7508 .0000699 14308 6 month 1.3380 7474 110.84 111.06 .00902 .00900 Middle East/Africa 00904 110.58 Bahrain dinar 2.6345 .3796 Egypt pound Israel shekel .00911 109.73 4.0295 .0558 17.918 2482 6838 2754 3.6306 1.4624 Kuwait dinar 3.3049 3026 Pakistan rupee .00821 121.74 Oman sul rial 2.59703 .39 Philippines peso 0187 53.393 Gatar rial .2743 3.6453 Singapore dollar South Korea won 7371 1.3566 Saudia Arabie riyal South Africa rand .2666 3.7506 .0008982 1113.32 .0746 13.4128 Taiwan dollar .03298 30.32 Tha land baht Vietnam dong .03025 33.06 .0000434 23040
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Corporate Finance
ISBN: 978-1259918940
12th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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