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You have an investment opportunity in Japan It requires an investment of $1 million today and will produce a cash flow of ¥ 114 million in one year with no risk Suppose the risk-free interest rate

    1. You have an investment opportunity in Japan. It requires an investment of $1 million today and will produce a cash flow of ¥ 114 million in one year with no risk. Suppose the risk-free interest rate in the United States is 4%, the risk-free interest rate in Japan is 2%, and the current competitive exchange rate is ¥ 110 per $1. What is the NPV of this investment? Is it a good opportunity?

 

 

 

May 22 2020 View more View Less

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