Required: A five-year, 9.0 percent Euroyen bond sells at par. A comparable risk five-year, 10.5 percent yen per dollar dual currency bond pays $843.33 at maturity. It sells for 110,000. What is the implied* per $ exchange rate at maturity? Hint: The dual-currency bond pays 10.5 percent interest on a notional value of £100,000, whereas the par value of the bond is not necessarily equivalent to 100,000. Note: Do not round Intermediate calculations. Round PVIFA and PVIF to 4 decimals. Answer is complete but not entirely correct. Implied exchange rate S) per 192.495

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A five-year, 9.0 percent Euroyen bond sells at par. A comparable risk five-year, 10.5 percent yen per dollar dual currency bond pays
$843.33 at maturity. It sells for $110,000. What is the implied * per $ exchange rate at maturity? Hint: The dual-currency bond pays 10.5
percent interest on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to 100,000.
Note: Do not round Intermediate calculations. Round PVIFA and PVIF to 4 decimals.
Answer is complete but not entirely correct.
(per
S)
Implied exchange rate
192.495
Transcribed Image Text:Required: A five-year, 9.0 percent Euroyen bond sells at par. A comparable risk five-year, 10.5 percent yen per dollar dual currency bond pays $843.33 at maturity. It sells for $110,000. What is the implied * per $ exchange rate at maturity? Hint: The dual-currency bond pays 10.5 percent interest on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to 100,000. Note: Do not round Intermediate calculations. Round PVIFA and PVIF to 4 decimals. Answer is complete but not entirely correct. (per S) Implied exchange rate 192.495
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