Question
Current exchange rates, 6 month forward exchange rates and risk free interest rates are as follows: SpotfwdspotFwd Per C$Per C$Per US$Per US$ Australian Dollars1.239011.228911.480381.47065 British
Current exchange rates, 6 month forward exchange rates and risk free interest rates are as follows:
SpotfwdspotFwd
Per C$Per C$Per US$Per US$
Australian Dollars1.239011.228911.480381.47065
British Pounds0.5351740.54560.6394270.6495
Canadian Dollars1.001.001.19481.2231
Euro0.6559240.649930.7836990.7811
Suppose interest rate parity holds.
If the current six-month risk-free rate in the United States is 4.4%, what must the six-month risk-free rate be in Britain?(***Carry all decimal places for interim calculations, round final answers to 4 places.***)
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
