The interest rate in South Africa is 8%. The interest rate in the U.S. is 5%. The South African forward rate should exhibit a premium of about 3%.

Name: The interest rate in South Africa is 8%. The interest rate in the U.S. is 5%. The South African forward rate should exhibit a premium of about 3%.
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The forward rate should exhibit a discount of about 3% for the South African currency, not a premium, because its interest rate is higher than that of the U.S.

The Interest Rate in South Africa Is 8