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Can you please provide the explanation, formula and correct answer for the problem above? The current price of a German bond is 98 and the
Can you please provide the explanation, formula and correct answer for the problem above?
The current price of a German bond is 98 and the current exchange rate is 1=$1.05. The bond pays a coupon of 10 per period. You expect the bond price to increase to 105 at the end of the period. Also, you expect the exchange rate to become 1=$1.15 at the end of the period. What is the expected dollar rate of return on the German bond for the period? Select one: a. 28.52% b. 19.00% c. 25.55% d. 22.87%Step by Step Solution
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