Question
Problem 20-10 Exchange Rates and Arbitrage Suppose the spot and 180-day forward rates on the Norwegian krone are Kr 5.82 and Kr 5.97, respectively. The
Problem 20-10 Exchange Rates and Arbitrage
| Suppose the spot and 180-day forward rates on the Norwegian krone are Kr 5.82 and Kr 5.97, respectively. The annual risk-free rate in the United States is 3.62 percent, and the annual risk-free rate in Norway is 5.32 percent. |
| The 180-day forward rate on the Norwegian krone would have to be Kr/$ to prevent arbitrage. (Do not round intermediate calculations and round your final answer to 4 decimal places (e.g., 32.1616).) |
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
7th Edition
0073368717, 978-0073368719
