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Question 31 2.5 pts Suppose that Richard Flare, a North Carolina-based...

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Finance

Question 31
2.5 pts
Suppose that Richard Flare, a North Carolina-based investor, has $1,000,000 to invest for six months. Flare is considering the purchase of U.S. Treasury bills that yield the six-month (i.e. non-annualized) rate of 2.545% and have a maturity of 26 weeks, or a six-month debt security issued by Mizuho Bank, a Tokyo-based financial corporation, that is expected to have a similar risk level. If the spot exchange rate is $1=150 and the six-month forward rate is $1.00=155, please answer:
What will be the six-month interest rate offered by Mizuho based on which Flare will be indifferent between investing in six-month Treasury bills or six-month debt securities issued by Mizuho?
5.13%
5.96%
6.12%
3.33%
Question 32
2.5 pts
Same facts as above: How much in U.S. Dollars would Flare make if Mizuho offers 7.12% in interest rates.
3.42%
4.56%
3.66%
5.12%
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