The present rate for deutsche marks per dollar is 1.79 and 90-day forward rate is 1.78. Compute the annualized discount rate in dollar assuming 365 days in a year. A. -2.266% В. -2.37% С. -2.97% D. -2.164%

The present rate for deutsche marks per dollar is 1.79 and 90-day forward rate is 1.78. Compute the annualized discount rate in dollar assuming 365 days in a year. A. -2.266% В. -2.37% С. -2.97% D. -2.164%

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 4QA

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The present rate for deutsche marks per dollar is 1.79 and 90-day forward rate is 1.78.
Compute the annualized discount rate in dollar assuming 365 days in a year.
A. -2.266%
B. -2.37%
C. -2.97%
D. -2.164%

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