I will give full points whoever gives me best answer 1. the dollar denominated r
ID: 2708378 • Letter: I
Question
I will give full points whoever gives me best answer
1. the dollar denominated risk free rate is 4% while the yen denominated risk free rate is 1%. The beta of the yen is 0.1 and the market risk premium is 6%. Based on the capm, you expect the yen to appreciate/depreciate?
2. what was the dollar return on investment in a yen dominiated asset that yielded 10%(in yen), while the yen depreciated by 8.5% over period?
a)1.5
b)-1.5
c)0.65%
d)-0.65%
3. Suppose that the 30day london interbank offer rate is 6%(all rates are stated on an annualized basis). What is the effective annual rate for payment on a new $1million loan with 2% origination fees and monthly payment?
a)5000
b)6.10%
c)6%
d)6.12%
e)0.51%
Explanation / Answer
2)0.65
3)a)5000