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Use the information below to answer the following questions. Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward Currency per U.S. $
Use the information below to answer the following questions. Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward Currency per U.S. $ 12372 1.2361 100.2800 100.1000 .6797 .6776 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 4 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia? (Enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What must the six-month risk-free rate be in Japan? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) a b. c. Australian risk-free rate Japanese risk-free rate Great Britain risk-free rate
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