6. Factors affecting international bond prices

Suppose you invested in a bond that has a par value of 2,307,692.3077 British pounds, a coupon rate of 5 percent (with payments being made at the end of each year), and four years until its maturity. Also suppose that the value of the pound is currently $1.30.

For each of the scenarios, calculate the forecasted cash flows for years 1, 2, 3, and 4. (Hint: Do not round intermediate calculations. Round your final answers to the nearest whole dollar value.)

6. Factors affecting international bond prices Suppose you invested in a bond that has a par value of 2,307,692.3077 British pounds, a coupon rate of 5 percent (with payments being made at the end of each year), and four years until its maturity. Also suppose that the value of the pound is currently $1.30. For each of the scenarios, calculate the forecasted cash flows for years 1, 2, 3, and 4. (Hint: Do not round intermediate calculations. Round your final answers to the nearest whole dollar value.) Year 1 Year 4 Scenario I (Stable Pound) Forecasted value of the pound Forecasted dollar cash flows Year 2 $1.30 Year 3 $1.30 $1.30 $1.30 $ Year 1 Year 3 Scenario II (Weak Pound) Forecasted value of the pound Forecasted dollar cash flows Year 2 $1.26 Year 4 $1.20 $1.28 $1.24 Scenario III (Strong Pound) Forecasted value of the pound Forecasted dollar cash flows Year 1 $1.32 Year 2 $1.35 Year 3 $1.38 Year 4 $1.41 $