Interest Rate Parity

Assume that interest rate parity holds and that $90-$day risk$-$free securities yield $4\%$ in the United

States and $4\mathrm{.}3\%$ in Germany. In the spot market, $1$ euro equals $$1\mathrm{.}36.$

What is the $90-$day forward rate? Do not round intermediate calculations. Round your answer to four

decimal places.

$

Is the $90-$day forward rate trading at a premium or discount relative to the spot rate?

The $90-$day forward rate is trading at a

relative to the spot rate.Assume that interest rate parity holds and that $90-$day risk$-$free securities yield $4\%$ in the United States and $4\mathrm{.}3\%$ in Germany. In the spot market, $1$ euro equals $$1\mathrm{.}36.$

What is the $90-$day forward rate? Do not round intermediate calculations. Round your answer to four decimal places.