Explore BrainMass
Share

Explore BrainMass

    How do I solve this using this formula?

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Given:

    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:
    1+i=(1/R)(1+i*) F=(1+i*)(F/R)

    (i= domestic int rate; i*=foreign int rate)

    © BrainMass Inc. brainmass.com October 9, 2019, 3:58 pm ad1c9bdddf
    https://brainmass.com/economics/exchange-rates/solve-using-formula-18758

    Solution Summary

    The expert determines how to solve an equation using formulas. A British six-month government bonds which offer an interest rate are found.

    $2.19