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Use the information below to answer the following questions. Currency per U.S. S Australia dollar Japan Yen U.K. Pound 1.2371 1.2362 100.2700 100.1100 6798 6775
Use the information below to answer the following questions. Currency per U.S. S Australia dollar Japan Yen U.K. Pound 1.2371 1.2362 100.2700 100.1100 6798 6775 6-months forward 6-months forward 6-months forward 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.) rounded to 2 decimal places, e.g., 32.16.) 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 c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a a. Australian risk-free rate b. Japanese risk-free rate c. Great Britain risk-free rate
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