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(C) If the spot rate is 9.50 AED per OMR. The annual interest rates are 12% in the UAE. If these interest rates remain

 

(C) If the spot rate is 9.50 AED per OMR. The annual interest rates are 12% in the UAE. If these interest rates remain constant, what is the market forecast of the spot rate for the OMR in two years?. You are required to: (25 marks) i. Calculate market forecast of the spot rate for the OMR in two years (5 marks). ii. Discuss interest rate risk of the report (20 marks).

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