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Assume that interest rate parity holds. U.S. interest rate is 7% and the interest rate in Australia is 2%. The forward rate on Australian dollar

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Assume that interest rate parity holds. U.S. interest rate is 7% and the interest rate in Australia is 2%. The forward rate on Australian dollar exhibits a of percent. (Use the exact formula.) premium;4.90 premium; 4.67 discount; 4.90 discount;4.67 Question 15 ( 3.57 points) Assume the following information: Current spot rate of Fijian Dollar =$0.48 Forecasted spot rate of Fijian Dollar 1 year from now =$0.45 1 -year forward rate of Fijian Dollar =$0.46 Annual interest rate for Fijian Dollar deposit =8% Annual interest rate in the U.S. =2% Given the information in this question, the return from covered interest arbitrage by U.S. investors with $500,000 to invest is \%. about 6.00 about 1.25 Given the information in this question, the return from covered interest arbitrage by U.S. investors with $500,000 to invest is % about 6.00 about 1.25 about 3.50 about 15.20 about 12.70

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