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Use the information below to answer the following questions. Currency per U.S. $ Australia dollar 1.2371 6-months forward 1.2362 Japan yen 100.2700 6-months forward 100.1100

Use the information below to answer the following questions.

Currency per U.S. $
Australia dollar 1.2371
6-months forward 1.2362
Japan yen 100.2700
6-months forward 100.1100
U.K. pound .6798
6-months forward .6775

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.

Requirement 1:

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.)

Risk-free rate %
Requirement 2:

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.)

Risk-free rate %
Requirement 3:

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.)

Risk-free rate %

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