Question
You know the following. The interest rate in the $ is 10% and in the euro it is1 6%. If the spot ER is euro/$
You know the following. The interest rate in the $ is 10% and in the euro it is1 6%. If the spot ER is euro/$ 1 (meaning 1 euro for 1 dollar) SHOW IN DETAIL what the forward rate will be. Assume that interest rate parity in an absolute form holds true. Explain your answer.
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
