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What must the six-month risk-free rate be in australia

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Reference no: EM132216751

Question - Use the information below to answer the following questions.

 

Currency per U.S. $

Australia dollar

1.2389

6-months forward

1.2344

Japan Yen

100.4500

6-months forward

99.9300

U.K. Pound

.6797

6-months forward

.6776

Suppose interest rate parity holds, and the current risk-free rate in the United Sates is 3 percent per six months.

Requirements -

1. What must the six-month risk-free rate be in Australia?

2. What must the six-month risk-free rate be in Japan?

3. What must the six-month risk-free rate be in Great Britain?

Reference no: EM132216751

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