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consider a Dutch investor with 100000 to invest in either Netherlands or Great Britain. The 90 day interest rate is 2% in grate Britain and
consider a Dutch investor with 100000 to invest in either Netherlands or Great Britain. The 90 day interest rate is 2% in grate Britain and 4.5% in the Netherlands. The 90 day forward exchange rate is 1.565/ and the spot rate is 1.25/. Answer the following questions using the covered interest parity condition where necessary.is the pound trading at a forward premium or discount?justify your answer and also calculate the annualized percentage premium / discount
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