Question
Egypt and Japan are the countries Future/Forward Rate and Interest Rate Parity. 1) Does future/forward market exist on your currency against US Dollar and/or other
Egypt and Japan are the countries
Future/Forward Rate and Interest Rate Parity. 1) Does future/forward market exist on your currency against US Dollar and/or other major currencies? Find the one-year future/forward rate at the beginning of year 2021 (or any duration and time available). 2) Compute the difference between future/forward rate and spot rate. Is it a premium or discount? 3) Check the money market rate (one-year government security) of US$ and your currency in year 2021 (or any duration and time consistent with 2.1), and make comparison. 4) Use above information to check if interest rate parity holds. 5) Can you identify any arbitrage opportunity?
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