Question
Assume the following information: The spot quote for the euro is $0.64 The 180-day forward rate of the euro is $0.62 The 180-day interest rate
Assume the following information:
The spot quote for the euro is $0.64
The 180-day forward rate of the euro is $0.62
The 180-day interest rate in the United States is 6%
The 180-day interest rate in Europe is 9%.
What should the 180-day interest in Europe be for Interest Rate Parity to hold?
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Introduction To Derivatives And Risk Management
Authors: Don M. Chance, Robert Brooks
10th Edition
130510496X, 978-1305104969
