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Use the information below to answer the following questions. Currency per U.S. $ 1.3392 Australia dollar 6-months forward 1.3389 Japan Yen 6-months forward 110.84 109.73
Use the information below to answer the following questions. Currency per U.S. $ 1.3392 Australia dollar 6-months forward 1.3389 Japan Yen 6-months forward 110.84 109.73 U.K. Pound 7543 6-months forward 7474 Suppose interest rate parity holds, and the current risk-free rate in the United States is 2.1 percent per six months. a. What must the six-month risk-free rate be in Australia? (Do not round intermediate calculations and 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? (Do not round intermediate calculations and 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Risk-free rate a. b. Risk-free rate Risk-free rate C. Use the information below to answer the following questions. Currency per U.S. $ 1.3392 Australia dollar 6-months forward 1.3389 Japan Yen 6-months forward 110.84 109.73 U.K. Pound 7543 6-months forward 7474 Suppose interest rate parity holds, and the current risk-free rate in the United States is 2.1 percent per six months. a. What must the six-month risk-free rate be in Australia? (Do not round intermediate calculations and 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? (Do not round intermediate calculations and 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Risk-free rate a. b. Risk-free rate Risk-free rate C
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