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We know that the yen and the swiss franc have a 170yen/ sf 1 exchange rate, meaning one swiss franc buys 170 yen in the spot ER market.

A.   We know that the yen and the swiss franc have a 170yen/ sf 1 exchange rate, meaning one swiss franc buys 170 yen in the spot ER market. The 1 year forward rate is 180 yen /swiss franc, or 1 franc buys 180 yen in the forward market. If the swiss franc has an interest rate of .06, what should the yen rate be for IPT (interest parity theory) to be attained? Show everything in yen and swiss franc terms.

I did it for the yen but I don’t know how to do the other one

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We know that the yen and the swiss franc have a 170yen/ sf 1 exchange rate, meaning one swiss franc buys 170 yen in the spot ER market.
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could you please help me and show me which formula you use ?

Exchange rate = 170 yen/1sf

Forward Rate F = 180 yen/sf

Swiss franc IR 6%

(1+id) = (S/F) * (1+if)

F= S * (1+if) / * (1+id)

180/170= (1+x%) / (1+0.06)

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