A five-year, 6.5 percent Euroyen bond sells at par. A comparable risk five-year, 8.0 percent yen/dollar dual-currency bond pays $838.33 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The dual-currency bond pays 8.0 percent on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to ¥100,000. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

A five-year, 6.5 percent Euroyen bond sells at par. A comparable risk five-year, 8.0 percent yen/dollar dual-currency bond pays $838.33 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The dual-currency bond pays 8.0 percent on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to ¥100,000. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 7MC

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