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Please answer all! If a 6 month T-bill in the U.S. has an interest rate of 4% and the 6 month forward premium on GBP/USD
Please answer all!
If a 6 month T-bill in the U.S. has an interest rate of 4% and the 6 month forward premium on GBP/USD is 1.5% then what is the implied 6 month interest rate for Great Britain? A. 1% B. 1% C. 1.5% D. 2.5% QUESTION 17 Interst rate parity states that if there is a forward premium, then the foreign currency will exhibit a higher interest rate True False QUESTION 18 If the U.S. interest rate is 4% and the forward premium for EUR/USD is 2%, and the interest rate in Germany is 3%, then interest rate parity is not violated and there is not an opportunity for an almost risk free profit. True FalseStep by Step Solution
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