Question: Use Table 18.2 to answer the following questions. Suppose interest rate parity holds, and the current risk-free rate in the United States is 1.2 percent

Use Table 18.2 to answer the following questions. Suppose interest rate parity holds, and the current risk-free rate in the United States is 1.2 percent per six months. What must the six-month risk-free rate be in Australia? In Japan? In Great Britain?

ALE 18.2 Exchange Rates: New York Closing Snapshot for Friday, November 28, 2014 Country Curmency USD quly Curency usS equiv per USD YTD % chg per USD YTD % chg Europe Czech Rep, koruna Denmark krone Euro area euro Hungary forint Norway krone Potand zioty 0450722.188 1 117385280 30 3897 2565 Argenting peso Brazil real Canada dolar Chile pesc Colombia peso Ecuador US dollar Mexico peso 1673 59757101 .2452 8031 0 75 .759 1.1417 ,6 .001642609, 1000 ts.s 14.9 unch 00406209 246 100010 14227.03051 2976 3.3598 1 280.1%17 0.5 0004511 0718 13.9334 34242.9210 lou 01989 50.274 2 Russla ruble Sweden lrona Switzerland frand 1342 7.4518 1 0357 9655 1.0362 9651 .0369 Uruguary peso Veneruela b. fuerte 15748031 300 ch 0424723.545 11 forward10382 Australan dolla 8507 1.1755 6-mos forward 8489 1.780 8452 1.1831 8397 1.1909 1628 6.143 -mos forward 45052.2200 5649 6390 15646 691 4.6 G-mos forward 3mos forward 5639 6394 Hong Kong dollar 129 7.7546unch 6-mos forward 15626 400 01606 62.25095 0000817 12246 Middle East/Africs Bahrain diner Egypt pound 00843 118.62 12. 2.6516 J771 unch 00844 11854 112 00844 118.49 11 008451183711 1399 7.147 2567 38950 123 1.4187 01109 901494 7049 2951 33887 2 78431.2750 Malaysia ringgit New Zealand dol Pakistan upee Phlippines peso 1.2 Kenye shilling 4292916 33 00982 101 80534 00066121512.45 Lebanon pound Saudi Arabla lya South Africa rand UAE dirham 2665 3.7529 0903 110695 2723 36731 unch 022344.905 1 76673043 South Korea won008983 1113254 Taiwan dollar Thaland baht Vietnam dong 03226 30999 0304532 843 00005 21355

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