6. An investment banker is considering the issue of a one-year Australian dollar/U.S. dollar currency- option bond. The currency-option bond is to be issued in AS (AS 1,000), and the interest and principal are to be repaid in AS or US$ at the option of the bondholder. The principal repaid would be either A$1,000 or US$520.83. The current spot exchange rate is A$1.92 per USS. The current one-year market interest rates are 9 percent in AS and 6 percent in USS. A one- year put option on the AS, with a strike price of A$1.92 per USS, is quoted at 3 U.S. cents; this is an option to sell one AS for 1/US$1.92. a. What should be the fair coupon rate set on this currency-option bond, according to market conditions? b. What is the value of the bond if it is issued at a coupon of 3.4 percent? 6. An investment banker is considering the issue of a one-year Australian dollar/U.S. dollar currency- option bond. The currency-option bond is to be issued in AS (AS 1,000), and the interest and principal are to be repaid in AS or US$ at the option of the bondholder. The principal repaid would be either A$1,000 or US$520.83. The current spot exchange rate is A$1.92 per USS. The current one-year market interest rates are 9 percent in AS and 6 percent in USS. A one- year put option on the AS, with a strike price of A$1.92 per USS, is quoted at 3 U.S. cents; this is an option to sell one AS for 1/US$1.92. a. What should be the fair coupon rate set on this currency-option bond, according to market conditions? b. What is the value of the bond if it is issued at a coupon of 3.4 percent