Suppose Susan (a U.S. investor) purchases a 20-day Euro-commercial paper with a par value of 10,000,000 Indian rupees for a price of 9,950,000 Indian rupees. If the rupee is worth $0.02, the spot rate is anticipated to be $0.021800 per rupee at the end of maturity, and Susan holds the Euro- commercial paper until then, assuming a 360 day year, the effective yield is: 17.35% 18.48% 18.86% O 19.05 %

Suppose Susan (a U.S. investor) purchases a 20-day Euro-commercial paper with a par value of 10,000,000 Indian rupees for a price of 9,950,000 Indian rupees. If the rupee is worth $0.02, the spot rate is anticipated to be $0.021800 per rupee at the end of maturity, and Susan holds the Euro- commercial paper until then, assuming a 360 day year, the effective yield is: 17.35% 18.48% 18.86% O 19.05 %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 2P

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