The Australian dollar - Japanese Yen exchange rate is currently given by $A 1= Yen 100. Australian Government 1-year bond rates are 2% while Japanese Government 1-year bond rates are 0.5%. Everything else being equal, Japanese currency investors should, a. Buy the $A, sell Japanese Government bonds and buy Japanese Yen b. Buy the $A, buy Japanese Government bonds and sell Japanese Yen c. Sell the $A, sell Australian Government bonds and buy Japanese Yen d. Sell the $A, buy Australian Government bonds and buy Japanese Yen
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- Assume that the interest rate in the Japan is 6% and that the Yen is expected to depreciate by 2% against the Australian dollar during the year. For each Australian dollar that an Australian resident invests in Japanese bonds, he/she can expect to get back a total of: A. $1.24 B. $1.08 C. $1.14 D. $1.04 E. $0.84Suppose the going one year interest rate in the U.S. is 3% while it is 1% in the Japan. Furthermore, the going exchange rate is 110 Japanese yen/ U.S. dollar. What is the effective financing rate in the U.S. from borrowing in Japan? -2% 2% 1% Not enough information is provided.If the spot rate is $0.50/NZ$ and the forward rate is $0.55/NZ$. The interest rate in USA is 9% and the interest rate in New Zealand is 4%. What would be per dollar benefit for the US investor from investing in New Zealand bonds? a. $0.054 b. -$ 0.054 c. $0.090 d. $ 0.040
- As a US multinational you decide to borrow long-term debt of 1 million JPY at 10% for one year. The exchange rate on the date you borrowed the debt is 100 JPY/$ and the exchange rate on the date you repaid the debt is 120 JPY/$. The Japanese inflation rate during the year is 6% and the US inflation rate is 4%. What is the nominal cost of borrowing the JPY debt in US$ terms? a) -8.33% b) -11.83% c) -12.33% d) +11.83%Give typing answer with explanation and conclusion Currency Exchange Question: (Currency Per USD) If Mexican Peso Rate (MXN)=17.996867 If Singapore Dollar Rate (SGD)=1.33511 A Mexican investor wishes to buy 10 SGD bonds - each selling for SGD135,422. How much will the investor need in MXN to buy these?If the spot rate is $0.50/NZ$ and the formate rate is $0.55/NZ$. The intreste rate in USA is 9% and the intreste rate in New Zealand is 4%. What would be per doller benefit for the US investor from Investing in New Zealand bonds. A. $0.054 B. -$0.054 C. $0.090 D. $0.040
- A. The value of the US Dollar today is GHS 6.1. Yesterday, the value of the US dollar was GHS 5.91. The Ghana Cedi ____ by ____%. B. Assuming that existing U.S. one year interest rate is 8% and the Canadian one-year interest rate is 9%. Also assume that interest rate parity exists. Should the forward rate of the Canadian dollar exhibit a discount or a premium? If U.S. investors attempt covered interest arbitrage, what will be their return? If Canadian investors attempt covered interest arbitrage what will be their return?You observe the following current rates: Spot exchange rate: $0.01/yen. Annual interest rate on 90-day U.S. dollar–denominated bonds: 4%. Annual interest rate on 90-day yen-denominated bonds: 4%. a. If uncovered interest parity holds, what spot exchange rate do investors expect to exist in 90 days? b. A close U.S. presidential election has just been decided. The candidate whom international investors view as the stronger and more probusiness person won. Because of this, investors expect the exchange rate to be $0.0095/yen in 90 days. What will happen in the foreign exchange market?the question in the picture says: Suppose that the current exchange rate is £1.73 = $1, but it is expected to be £1.69= $1 in one year. If the current interest rate on a one year government bonf in the united states is 5%, what dies the interest rate parity condition indicate the interest rage will be on a one yeat government bond in Germany? assume that there are no differences in risk, liquidity, taxation, or informatjon costs between the bonds. The German interest rage will be _%? (Round your response to two decimal places.)
- a. In New Zealand, the one-year interest rate is 6%. The one-year interest rate in the United States is 10%. The New Zealand dollar (NZ$) has a spot rate of $.50. The New Zealand dollar has a forward rate of $.54. i. Explain if covered interest arbitrage can benefit US or New Zealand investors. i. Explain why covered interest arbitrage is or is not conceivable in each situation.You live in Australia and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid AUD1.1848/USD AUD1.2434/USD Spot exchange rate 310-day Forward exchange rate 310-day USD interest rate 310-day AUD interest rate a. AUD 724,800 O b. AUD 242,000 C. AUD 219,261 d. AUD 292,187 AUD 203,146 6.60% p.a. 8.71% p.a. What will your profit (in AUD) be 310 days from now if you borrow AUD7 million and invest in the United States then convert back to the Australian dollar? O e. Ask AUD1.1789/USD AUD1.2712/USD 6.83% p.a. 9.30% p.a.Use the information below to answer the following questions. Currency per U.S. $ 1.2380 1.2353 Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward 100.3600 100.0200 .6789 .6784 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia? (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? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Australian risk-free rate b. Japanese risk-free rate c. Great Britain risk-free rate c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % % %