The 6-month u s t-bills have a nominal rate of 8 while the, Ask an Expert

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The 6-month U. S. T-bills have a nominal rate of 8%, while the default-free German bonds that mature in 6 months have a nominal rate of 6%. In the spot exchange market, one euro equals $0.70.

a) If interest rate parity holds, what is the 6-month forward exchange rate?

b) How many U. S. dollars would you receive for every euro exchanged in 6 months?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91617854

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