< Back to Assignment Attempts: Keep the Highest: /0.1 6. Factors affecting international bond prices Suppose you invested in a bond that has a par value of 2,000,000 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 $1.50. 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.) Scenario I (Stable Pound) Forecasted value of the pound Forecasted dollar cash flows Year 1 $1.50 $ Scenario II (Weak Pound) Forecasted value of the pound Forecasted dollar cash flows Year 1 $1.48 $ Scenario III (Strong Pound) Forecasted value of the pound Year 1 $1.52 Forecasted dollar cash flows $ Year 2 $1.50 Year 3 $1.50 $ Year 2 $1.46 Year 3 $1.44 S Year 2 $1.55 $ Year 4 $1.50 $ Year 4 $1.40 $ Year 3 $1.58 Year 4 $1.61 $ Based on your calculations, the most attractive foreign bonds are those that are denominated in a currency which over time. Grade It Now Save & Continue Continue without saving