In: Finance
I do not understand what PVIFA stands for in this problem and how you are getting the S5(Yen/$) figure (INternational Financial Management Eun & Resnick Chapter 12 Problem 3)
. A five-year, 4 percent Euroyen bond sells at par. A comparable risk five-year, 5.5 percent yen/dollar dual-currency bond pays $833.44 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The par value of the bond is not necessarily equivalent to ¥100,000