.Assume that annual interest rates are 1.4 percent in the United States and 0.9 percent in Japan. A Bank can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is US$0.007/. If the bank borrows a sum of US$2million. What forward rate will prevent an arbitrage opportunity?

NOTE: Do not write comma (,) or any $ or symbols, USD/Yen etc in your answer. Simply write the absolute value as your answer.

For example if your answer is US$0.0099/, then just write 0.0099.

Question 7 Not yet answered Marked out of 4.00 Assume that annual interest rates are 1.4 percent in the United States and 0.9 percent in Japan. A Bank can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is US$0.007/. If the bank borrows a sum of US$2million. What forward rate will prevent an arbitrage opportunity? NOTE: Do not write comma (1) or any $ or \symbols, USD/Yen etc in your answer. Simply write the absolute value as your answer. For example if your answer is US$0.0099/4, then just write 0.0099. P Flag question Answer: Question 7 Not yet answered Marked out of 4.00 Assume that annual interest rates are 1.4 percent in the United States and 0.9 percent in Japan. A Bank can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is US$0.007/. If the bank borrows a sum of US$2million. What forward rate will prevent an arbitrage opportunity? NOTE: Do not write comma (1) or any $ or \symbols, USD/Yen etc in your answer. Simply write the absolute value as your answer. For example if your answer is US$0.0099/4, then just write 0.0099. P Flag