Question
Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.84 and Kr 5.99, respectively. The annual risk-free rate in the United
| Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.84 and Kr 5.99, respectively. The annual risk-free rate in the United States is 3.64 percent, and the annual risk-free rate in Norway is 5.34 percent. |
| b. | The six-month forward rate on the Norwegian krone would have to be Kr/$ to prevent arbitrage. (Round your answer to 4 decimal places. (e.g., 32.1616)) |
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Acquisition Finance
Authors: Tom Speechley
2nd Edition
1780436599, 978-1780436593
