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Consider the following: The Namibian risk- free rate is 3.75 percent, the US risk-free rate is 2.75 percent, and the spot exchange rate between the
Consider the following: The Namibian risk- free rate is 3.75 percent, the US risk-free rate is 2.75 percent, and the spot exchange rate between the United States and Namibia is NS 13.7756. 1. Calculate the continuously compounded U.S. and Namibian risk-free rates. 2. Calculate the price at which you could enter into a forward contract that expires in 90 days. a. 1. US: 0.036814, Namibia: 0.027129 2. N$ 13.93172 b. 1. US: 0.036814, Namibia: 2 NS 14 2541 027129
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