Solved: What is the six-month forward exchange rate, Finance Basics

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What is the six-month forward exchange rate

Question:

Six-month t-bills have a nominal rate of 7 percent, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5 percent. In the spot exchange market, 1 Yen equals $0.009. If interest parity holds, what is the 6-month forward exchange rate?

Please show calculations.

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Finance Basics: What is the six-month forward exchange rate

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Finance Basics: What is the six-month forward exchange rate

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