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use excel to answer all questions. Show all the steps and formulas used. Show cell references. Interest rate Parity & Purchasing Power Parity: 1. An
use excel to answer all questions. Show all the steps and formulas used. Show cell references.
Interest rate Parity \& Purchasing Power Parity: 1. An investor has a 6 month rate in Switzerland of 4%, spot exchange of $0.9252/SF, forward of $0.9270. What is the 6 month rate in the US? 2.On Aug 8. the 3 month rate in US was 3.75% and in Japan 3\%. Spot exchange rate of $0.0090704. What is the forward? How does this estimate compare to the 3 month forward of $0.0108/ Yen in table 19.1? What if anything does the difference imply to you about arbitrage opportunities? 3.If a new iMac costs $1400 at a spot rate for euros of 0.76 per $, what is the price in euros for the iMac? 4. If a new Samsung Blue Ray cost Yen 4,000 in Japan and current spot rate is Yen 0.104/$. How much should this machine cost in the US? 5.You have $1,000,000 to invest and you observe the following quotes in the market: 1$=106 180-day forward rate =103.50 U.S. 180-day risk-free interest rate =4.4%. Japan 180-day risk-free interest rate =2%. Determine whether interest rate parity holdsStep by Step Solution
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