5. You have $1,000,000 to start with. Here are the facts: Yen Spot Rate 107.5 Yen/$...
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5. You have $1,000,000 to start with. Here are the facts: Yen Spot Rate 107.5 Yen/$ Yen Fwd Rate = 102.5 Yen/$ (6 months) Interest Rates in Japan are 4% per annum (2% for 6 months). Interest Rates in the USA are 8% per annum (4% for 6 months) for securities of similar risk and maturity. What should you do???? 5. You have $1,000,000 to start with. Here are the facts: Yen Spot Rate 107.5 Yen/$ Yen Fwd Rate = 102.5 Yen/$ (6 months) Interest Rates in Japan are 4% per annum (2% for 6 months). Interest Rates in the USA are 8% per annum (4% for 6 months) for securities of similar risk and maturity. What should you do????
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Based on the given facts you can use the following steps to determine what you should do 1Convert your 1000000 to yen using the spot rate 1000000 1075 ... View the full answer
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