The Spot Exchange Rate (R) between the British Pound and the Japanese Yen is Y190.00/L
The Six Month foward rate (F) is Y199.0476/L
British six-month government bonds offer an interest rate of 5%
Assuming that the global finaincial markets are perfectly efficent, what interest rate should Japanese six-month government bonds be offering? Using this formula:
(i= domestic int rate; i*=foreign int rate)© BrainMass Inc. brainmass.com March 4, 2021, 5:55 pm ad1c9bdddf
The expert determines how to solve an equation using formulas. A British six-month government bonds which offer an interest rate are found.