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Use the information below to answer the following questions. Currency per U.S. $ Australia dollar 1.2372 6-months forward 1.2361 Japan yen 100.2800 6-months forward 100.1000
Use the information below to answer the following questions. Currency per U.S. $ Australia dollar 1.2372 6-months forward 1.2361 Japan yen 100.2800 6-months forward 100.1000 U.K. pound .6797 6-months forward .6776 Suppose interest rate parity holds, and the current risk-free rate in the United States is 4 percent per six months. Use the approximate interest rate parity condition to answer this question. What must the six-month risk-free rate be in Australia Japan and Great Britian?
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