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The interest rate on Guatemalan government bonds is 22% and the current exchange rate is 0.17 quetzals/ Canadian dollar. If the forward exchange rate is

The interest rate on Guatemalan government bonds is 22% and the current exchange rate is 0.17 quetzals/ Canadian dollar. If the forward exchange rate is 0.15 quetzals/Canadian dollar, and the current Canadian risk free rate is 4.5%, what is the default risk premium on Guatemalan government bonds?

Question 6 options:

3.57%

-7.79%

29.8%

18.4%

7.79%

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