Use the following graph to answer questions 23-24.
Figure 6.1: Yield Curves
-Refer to Figure 6.1.The forward _________ on the U.S.dollar becomes ______ at higher maturities.

Question

Use the following graph to answer questions 23-24.
Figure 6.1: Yield Curves 
-Refer to Figure 6.1.The forward _________ on the U.S.dollar becomes ______ at higher maturities.

Quizplus · Accepted Answer

The forward premium on a currency increases at higher maturities if the interest rate in the domestic country is higher than in the foreign country, leading to a larger premium on the domestic currency as the maturity extends.

Use the Following Graph to Answer Questions 23-24