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Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.86 and Kr 6.01, respectively. The annual risk-free rate in the United
Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.86 and Kr 6.01, respectively. The annual risk-free rate in the United States is 3.66 percent, and the annual risk-free rate in Norway is 5.36 percent. |
Using the approximation, the six-month forward rate on the Norwegian krone would have to be Kr/$ ________ to prevent arbitrage. (Do not round intermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616) |
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