Question
Assume that interest rate parity holds. The U.S. four-year interest rate is 9% annualized, and the Danish four-year interest rate is 4% annualized. Today's spot
Assume that interest rate parity holds. The U.S. four-year interest rate is 9% annualized, and the Danish four-year interest rate is 4% annualized. Today's spot rate of the Danish krone is $.182. What is the approximate four-year forecast of the krone's spot rate if the four-year forward rate is used as a forecast?
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Finance Applications and Theory
Authors: Marcia Cornett
4th edition
1259691411, 978-1259691416
