About the interest rate parity

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Interest rate parity

Six-month T-bills have a nominal rate of 5%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2.5%. In the spot exchange market, 1 yen equals $0.008. If interest rate parity holds, what is the 6-month forward exchange rate? Round your answer to five decimal places.

Reference no: EM13810507

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