(172) Interest Rate Parity Six-month T-bills have a nominal rate of 7%, while default-free Japanese bonds that...

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(17–2)

Interest Rate Parity Six-month T-bills have a nominal rate of 7%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate?

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