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Use the information below to answer the following questions. Suppose interest rate parity holds, and the current risk-free rate in the United States is 5
Use the information below to answer the following questions. Suppose interest rate parity holds, and the current risk-free rate in the United States is 5 percent per six months. Use the approximate interest rate parity condition to answer this question. a. What must the six-month risk-free rate be in Australia? Note: 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? Note: 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? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16
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