3.   Assume that the Japanese one-year interest rate is 5 percent, while the U.S. one-year interest rate is 8 percent. What percentage change in the Japanese yen would cause a U.S. firm borrowing yen to incur the same effective financing rate as it would if it borrowed dollars?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter21: International Cash Management
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3.   Assume that the Japanese one-year interest rate is 5 percent, while the U.S. one-year interest rate is 8 percent. What percentage change in the Japanese yen would cause a U.S. firm borrowing yen to incur the same effective financing rate as it would if it borrowed dollars?

 

 

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2.86%

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