Because obtaining forward rate quotes for as long as four years in the future is difficult,managers normally use the covered ________ to compute ________.

Question

Quizplus · Accepted Answer

Covered interest rate parity is a fundamental principle in the foreign exchange markets that relates the interest rate differential between two countries to the differential between the forward and spot exchange rates. Managers use this concept to compute forward rates when direct quotes are not available or are difficult to obtain for long-term periods.

Because Obtaining Forward Rate Quotes for as Long as Four