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

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Interest rate parity

Six-month T-bills have the nominal rate of 6%, while default-free Japanese bonds which mature in 6 months have the nominal rate of 2%. In the spot exchange market, 1 yen equals $0.0105. If interest rate parity holds, determine the 6-month forward exchange rate? Round your answer to five decimal places.

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Category:- Basic Finance
Reference No.:- M91145428

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