In a market with an unchanged current exchange rate where the interest parity condition​ holds, if investors now expect the exchange rate to be 6.25​% lower a year from​ now, the return on foreign bonds with an interest rate of 5.75​%would be ____enter your response here​%. ​(Enter your response rounded to two 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
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In a market with an unchanged current exchange rate where the interest parity condition​ holds, if investors now expect the exchange rate to be 6.25​% lower a year from​ now, the return on foreign bonds with an interest rate of 5.75​%would be ____enter your response here​%. ​(Enter your response rounded to two decimal​ places.)

 

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