Assume that a one-year Malaysian bond yields 10 percent interest and that the dollar return on maturity is 5 percent. If the exchange rate at maturity is $1 = MYR 4.00 (Malaysian ringgit), what was the exchange rate at the time the bond was purchased?
a. $1 = MYR 4.2
b. $1 = MYR 3.8
c. $1 = MYR 3.6
d. MYR 1 = $0.26
e. MYR 1 = $0.4
b
Economics
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