A five-year, 8

Business Mar 27, 2023

A five-year, 8.0 percent Euroyen bond sells at par. A comparable risk five-year, 9.5 percent yen/dollar dual-currency bond pays $841.33 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The dual-currency bond pays 9.5 percent on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to ¥100,000.