Suppose that the 90-day forward rate on the euro is $1.45145, while the current spot rate is $1.4500. Which of the following best approximates the forward premium on an annualized basis?(Hint: Only consider 12 30-day months. In other words, consider a year to be only 360 days.) 0.10% O 0.40% 0.20% 0.30%
Suppose that the 90-day forward rate on the euro is $1.45145, while the current spot rate is $1.4500. Which of the following best approximates the forward premium on an annualized basis?(Hint: Only consider 12 30-day months. In other words, consider a year to be only 360 days.) 0.10% O 0.40% 0.20% 0.30%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Suppose that the 90-day forward rate on the euro is $1.45145, while the current spot rate is $1.4500.
Which of the following best approximates the forward premium on an annualized basis? (Hint: Only consider 12 30-day months. In other words,
consider a year to be only 360 days.)
0.10%
0.40%
0.20%
0.30%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23e68daf-ebc0-4879-801d-e6ff4304e960%2Fce046df0-2fbd-42bf-a354-c9b35a22306a%2Fkn9k7a_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that the 90-day forward rate on the euro is $1.45145, while the current spot rate is $1.4500.
Which of the following best approximates the forward premium on an annualized basis? (Hint: Only consider 12 30-day months. In other words,
consider a year to be only 360 days.)
0.10%
0.40%
0.20%
0.30%
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