Question
Suppose that annual interest rates are 5% in the U.S. and 3% in the UK with the 60-day forward rate for the pound at USD1.408/GBP.
Suppose that annual interest rates are 5% in the U.S. and 3% in the UK with the 60-day forward rate for the pound at USD1.408/GBP. Then the current spot rate will be at a _______ of ________ to the forward rate, such that the interest rate parity condition is satisfied.
a.
discount, 0.331%.
b.
premium, 0.329%
c.
premium, 0.328%
d.
discount, 0.326%
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Principles Of Corporate Finance Law
Authors: Eilis Ferran, Look Chan Ho
2nd Edition
0199671354, 978-0199671359
