Description of this paper

1.- Consider 8.5 percent swiss franc/U.S dollar du...

Description

Solution


Question

1.- Consider 8.5 percent swiss franc/U.S dollar dual currency bonds that pay $666.67 at maturity per SF 1,000 of par value. What is the implicit SF/$ exchange rate at maturity? will the investor be better or worse off a maturity if the actual SF/$ exchange rate is SF 1.35/$1.00? 2.- A five year, 4 percent Euroyen bond sells at par. A comparable risk five-year, 5.5 percent yen/dollar dual-currency bond pays $833.33 at maturity per Y100,000(yen) of face value. It sells for Y110,000(yen). What is the implied yen/dollar exchange rate at maturity

 

Paper#5729 | Written in 18-Jul-2015

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