If the 30-day yen interest rate is 3% p.a., and the 30-day euro interest rate is 5%

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If the 30-day yen interest rate is 3% p.a., and the 30-day euro interest rate is 5% p.a. What is the magnitude of the forward premium or discount on the yen?

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International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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Question Posted: May 28, 2012 03:26 AM

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If the 30-day yen interest rate is 3% p.a., and the 30-day euro interest rate is 5%

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We know that the high interest rate currency must sell at a forward discount when pri...View the full answer

International Financial Management

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