What will be forward rate if the current spot rate is €1=$1.40 and the risk-free rate in America and Europe is 5% and 4.30% respectively. A. $1.3907 B. $1.4520 C. $2.2220 D. $1.6253

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 28QA
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You are attempting question 4 out of 12
What will be forward rate if the current spot rate is €1= $1.40 and the risk-free rate in
America and Europe is 5% and 4.30% respectively.
A. $1.3907
B. $1.4520
C. $2.2220
D. $1.6253
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Transcribed Image Text:Note: - You are attempting question 4 out of 12 What will be forward rate if the current spot rate is €1= $1.40 and the risk-free rate in America and Europe is 5% and 4.30% respectively. A. $1.3907 B. $1.4520 C. $2.2220 D. $1.6253 Answer Submit
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