The spot rate on the Dutch guilder is $0.39 and the 180?day forward rate is $0.40. The difference between the spot and forward rates means that
A) interest rates are higher in the U.S. than in the Netherlands
B) the guilder has risen in relation to the dollar
C) the inflation rate in the Netherlands is declining
D) the guilder is expected to fall in value relative to the dollar there is a high inflation rate in the U.S.
Correct Answer:
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