Suppose the spot exchange rate for the Korean won (KRW) is KRW120/USD (USD is the U.S. dollar).
Fantastic news! We've Found the answer you've been seeking!
Question:
Suppose the spot exchange rate for the Korean won (KRW) is KRW120/USD (USD is the U.S. dollar). If the risk-free rate of interest in the United States is 10% and the risk-free rate of interest in Korea is 5%, then what must be the one-year forward rate be to prevent covered interest arbitrage?
Related Book For
Posted Date: