Solution-Forecasts of appreciation in the cad and jpy

Forecasts of appreciation in the cad and jpy

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Reference no: EM132411046

Bati Inc. considers investing excess funds at home, in the U.S., at 2% for 90 days. Bati also considers investing in Canada, in Japan and forming a portfolio with 30% invested in Canadian dollars (CAD) and 70% in Japanese yen (JPY). The forecasts of appreciation in the CAD and JPY for the 90 days are as follows: Currency ef,T Probability CAD 1% 80% CAD 5% 20% JPY 0% 60% JPY 2% 40% The interest rate on the CAD is 3%, and the interest rate on the JPY is 1%. Where should Bati Inc invest: at home, in Japan, in Canada, or in the 70-30 portfolio?

Reference no: EM132411046

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Forecasts of appreciation in the cad and jpy

Reference no: EM132411046

Reference no: EM132411046

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