Interest rate paritysix-month t-bills have a nominal rate, Ask an Expert

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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 3%. In the spot exchange market, 1 yen equals $0.01. If interest rate parity holds, what is the 6-month forward exchange rate? Round your answer to five decimal places.

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Financial Management, Finance

Category:- Financial Management
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