Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States
Question:
a. Is the 90-day forward rate trading at a premium or a discount relative to the spot rate?
b. What is the 90-day forward rate?
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Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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