Question
The current exchange rate between the dollar and euro is $1.33 per euro. The nominal annual risk-free rate is 2% in the U.S. and 0.8%
The current exchange rate between the dollar and euro is $1.33 per euro. The nominal annual risk-free rate is 2% in the U.S. and 0.8% in Europe.
What should be the one-year forward premium according to interest rate parity?
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International Finance
Authors: Keith Pilbeam
5th Edition
1350347094, 978-1350347090
