Problem 17-12 Interest Rate Parity

Assume that interest rate parity holds and that 90-day risk-free securities yield 3% in the United States and 3.3% in Germany. In the spot market, 1 euro equals $1.49 dollar.

What is the 90-day forward rate? Round your answer to four decimal places. _________$ ?

Problem 16-3 Cost of Trade Credit

What is the nominal and effective cost of trade credit under the credit terms of 4/15, net 30? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations.

Nominal cost of trade credit_____________	%
Effective cost of trade credit_____________	%