Question
A five-year, 4 percent Euroyen bond sells at par. A comparable risk five year, 5.5 percent yen/dollar dual currency bond pays $833.33 at maturity. It
A five-year, 4 percent Euroyen bond sells at par. A comparable risk five year, 5.5 percent yen/dollar dual currency bond pays $833.33 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The par value of the bond is not necessarily equivalent to ¥100,000. (PVIFA4%,5=4.4518, PVIF4%,5=0.8219)
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Since the dual currency bond is of comparable risk it will ...
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
