Question
The spot price of one Bulgarian Lev (BGN) is $0.7800 . The 6-month no-arb forward price of one BGN is $0.7680 . Part A: Calculate
The spot price of one Bulgarian Lev (BGN) is $0.7800.
The 6-month no-arb forward price of one BGN is $0.7680.
Part A:
Calculate the difference in the US risk-free rate and the Bulgarian risk-free rate over the 6-month period.
Part B:
Assume the USD risk-free rate over the next 6 months is 2.00%.
Calculate the risk-free rate in Bulgaria over the next 6 months.
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
4th Edition
0256147175, 978-0256147179
