Suppose that the one-year U.S.interest rate is 8% and the equivalent one-year India interest rate is 12%.According to covered interest parity,there is:
A) Forward discount on dollar.
B) Forward premium on dollar.
C) Forward premium for Indian rupee.
D) Forward flat on dollar
Correct Answer:
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Q1: Assume the following: the current spot rate
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Q4: Assume that the 6-month iUS = 10%
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Q6: Suppose that the one-year U.S.interest rate is
Q7: If the U.S.and the U.K.have identical term
Q8: Assume the following: the current spot rate
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