Assume that interest rate parity holds U.S interest rate is 13% and Brittish interest rate is 15%. The foward rate on British pounds exhibits a ______ of _______ percent. a. premium 1.74 b. premium 1.77 c. discount 1.74 d. discount 1.77

Assume that interest rate parity holds U.S interest rate is 13% and Brittish interest rate is 15%. The foward rate on British pounds exhibits a of _ percent. a. premium 1.74 b. premium 1.77 c. discount 1.74 d. discount 1.77

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter6: Managing In The Global Economy

Section: Chapter Questions

Problem 6E

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Question

Assume that interest rate parity holds U.S interest rate is 13% and Brittish interest rate is 15%. The foward rate on British pounds exhibits a ______ of _______ percent.

a. premium 1.74

b. premium 1.77

c. discount 1.74

d. discount 1.77

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