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Suppose the spot and six-month forward rates on the Norwegian krone are Kr5.78 and Kr5.93, respectively. The annual risk-free rate in the United States is

Suppose the spot and six-month forward rates on the Norwegian krone are Kr5.78 and Kr5.93, respectively. The annual risk-free rate in the United States is 3.58 percent, and the annual risk-free rate in Norway is 5.28 percent.

The six-month forward rate on the Norwegian krone would have to be Kr ------------ /$ to prevent arbitrage.

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