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Suppose that you are the treasurer of SIEMENS with an extra 960,000 to invest for a year. You are considering the purchase of Eurozone government

Suppose that you are the treasurer of SIEMENS with an extra 960,000 to invest for a year. You are considering the purchase of Eurozone government bonds that yield 3.35% and have a maturity of 1 year. The spot exchange rate is 113/, and the 1-year forward rate is 112/.

Attempt 1/10 for 10 pts.

Part 1

What must the 1-year interest rate in Japan (on an investment of comparable risk) minimally be before you are willing to consider investing there?

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