Question
Interest Rate Parity (Multi-part question) Assume that interest rate parity holds and that 90-day risk-free securities yield 4% in the United States and 4.4% in
Interest Rate Parity (Multi-part question)
Assume that interest rate parity holds and that 90-day risk-free securities yield 4% in the United States and 4.4% in Germany. In the spot market, 1 euro equals $1.45.
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 -Select- premium/ discount relative to the spot rate.
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Management Of Islamic Finance
Authors: M. Kabir Hassan, Mamunur Rashid
1st Edition
1787564045, 978-1787564046
