Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Citibank wishes to invest in Yen loans at a rate of 10%

Citibank wishes to invest in Yen loans at a rate of 10%

Finance

Citibank wishes to invest in Yen loans at a rate of 10%. The bank will fund the loans in the domestic CD market at a rate of 6.3%. This on-balance-sheet FX risk will be hedged in the spot market at some forward rate. The spot ratio yen is USD 0.60/Yen. What must be the forward exchange rate to eliminate the preference for the yen loans?

Option 1

Low Cost Option
Download this past answer in few clicks

2.86 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE