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Use the information below to answer the following questions. Currency per U. $ Australia dollar 1.2380 6-months forward 1.2353 Japan Yen 100.3600...

Use the information below to answer the following questions.


Currency per U.S. $  

Australia dollar 1.2380                   

6-months forward 1.2353                

Japan Yen 100.3600                   

6-months forward 100.0200                

U.K. Pound .6789                   

6-months forward .6784               


Suppose interest rate parity holds, and the current risk-free rate in the United States is 5 percent per six months. Use the approximate interest rate parity equation to answer the following questions. 

 

Requirement 1: What must the six-month risk-free rate be in Australia? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

   Risk-free rate %  


Requirement 2: What must the six-month risk-free rate be in Japan? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

   Risk-free rate %  


Requirement 3: What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

   Risk-free rate % 

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