Question: i need problem 6 & 7 solved Accessibility Mode Print Immersive Reader 32 Problem 6: (8 points) Suppose you have an extra cash reserve of

i need problem 6 & 7 solved i need problem 6 & 7 solved Accessibility Mode Print Immersive Reader

Accessibility Mode Print Immersive Reader 32 Problem 6: (8 points) Suppose you have an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 6 percent per annum in the United States and 8 percent per annum in Germany. Currently, the spot exchange rate is 1.01 per dollar and the six- month forward exchange rate is 0.99 per dollar. You don't want to bear any exchange risk A. What is the total dollar amount do you get if you invest in the U.S.? B. What is the total dollar amount do you get if you invest in Germany? Problem 7A (6 points) Suppose that the annual interest rate is 6 percent in the United States and 4 percent in Germany, and that the spot exchange rate is SI = 0.88. What would be the one-year forward exchange rate? GIVE F ACE TOMICA Ashmita Khasnabish (PhD)

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