Assume that interest rate parity holds. In the spot market, 1 Japanese Yen= $0.00982, while in the 90-day forward market 1 Japanese Yen= $0.00983. In
Assume that interest rate parity holds. In the spot market, 1 Japanese Yen= $0.00982, while in the 90-day forward market 1 Japanese Yen= $0.00983. In Japan, 90-day risk-free securities yield 2%. What is the yield on 90-day risk-free securities in the United States? Please show work and explain.
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Authors: Louis C. Gapenski
2nd Edition
1567931650, 978-1567931655
