The French franc is currently worth $0.15 and it's selling in the 1-year forward market at a 10% premium relative to the dollar.Approximately what rate would you expect to pay for a 1-year loan in France if the rate would be 10% in the United States?
A) 10.00%
B) 11.62%
C) 14.55%
D) 20.88%
Correct Answer:
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