What is the appropriate price of bond

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Reference no: EM131560997

A zero-coupon British bond promises to pay £100,000 in five years. The current exchange rate is $2.00 = £1.00 and inflation is forecast at 3% in the U.S. and 2% in the U.K. per year for the next five years. The appropriate discount rate for a bond of this risk would be 10% if it paid in dollars. What is the appropriate price of the bond?

Reference no: EM131560997

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