Use Figure 21.1 to answer the following questions: Suppose interest rate parity holds, and the current six-month
Question:
Use Figure 21.1 to answer the following questions: Suppose interest rate parity holds, and the current six-month risk-free rate in the United States is 1.3 percent. What must the six month risk-free rate be in Great Britain? In Japan? In Switzerland?
Figure 21.1
Transcribed Image Text:
Country/Currency in US$ per US$ Country/Currency in US$ per US$ Americas Argentina peso Brazil real Europe Bulgaria lev Croatia kuna 1.774 6.75 .0167 60.0116 .56382 2391 4.1816 .1481 7608 .001287 Canada dollar 1.3145 Czech Rep. koruna Denmark krone Euro area euro .04381 22.827 Chile peso Colombia peso Ecuador US dollor Mexico peso Uruguay peso 777.3 6.778 .9070 .1475 .000297 3365.07 1.1026 Hungary forint Iceland krona Norway krone Poland zloty Romania leu Russia ruble 1 1 .00327912 304.96 .008025 .1105 .2590 .0532 18.7872 124.61 9.0484 3.8614 .02678 37.34 Asia-Pacific Australian dollar 1 month 3 month 6 month China yuan Hong Kong dollar India rupee Indonesia rupiah .0000737 Japan yen 1 month 3 month 6 month Kazakhstan tenge Macau pataca Malaysia ringgit New Zealand dollar Pakistan rupee Philippines peso Singapore dollar South Korea won .0008546 Sri Lanka rupee Taiwan dollar Thailand baht 2306 4.336 .6825 1.4652 62.073 9.5669 .01611 .6822 1.4659 Sweden krona .1045 1.0297 .6813 .6799 .1442 .1287 1.4678 Switzerland franc 1 month .9712 1.4708 1.0317 .9693 6.9367 3 month 1.0358 .9654 .9599 7.7725 6 month 1.0418 .01402 71.316 Turkey lira Ukraine hryvnia UK pound 1 month .1684 5.9391 13573 .0407 24.5652 109.28 .00915 .00915 1.3074 .7649 109.29 1.3062 .7656 .00915 109.30 3 month 1.3049 .7663 .00915 109.31 6 month 1.3038 7670 .00264 378.6 .1248923 Middle East/Africa 8.007 4.0655 0.246 Bahrain dinar Egypt pound Israel shekel 2.6529 3769 .6607 .00647 1.5135 .0633 15.8006 .2894 3.455 154.63 .0197 7400 50.801 Kuwait dinar Oman sul rial Qatar rial Saudi Arabia riyal South Africa rand 3.2912 3038 1.3514 1170.2 181.61 2.5974 .39 2747 3.6408 3.7517 .0055063 .03328 .2665 30.05 .0695 14.3928 .03272 30.56 Vintuan ד 0000 4215
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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