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Problem 17-12 Interest Rate Parity Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.5% in

Problem 17-12 Interest Rate Parity

Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.5% in Germany. In the spot market, 1 euro equals $1.34 dollar.
Is the 90-day forward rate trading at a premium or discount relative to the spot rate? -Select-premiumdiscountItem 1 What is the 90-day forward rate? Round your answer to four decimal places. $

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