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Use the information below to answer the following questions. Australia dollar 6-months forward Japan Yen 6-months forward UK 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 UK Pound 6-months forward Currency per U.S. $ 12380 1.2353 100.3600 100.0200 .6789 .6784 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 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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