A 15000 Danish Krone with a 5000 Krone coupon is trading at 18000 Krone and a 2000 Swiss Franc bill with a 200 Franc coupon is trading for 2100. Both mature in 1 year.

If uncovered interest parity holds, the market believes the Franc will appreciate against the Krone by approximately _____ % in a years’ time. (Round to the nearest 2 decimal points)

Answer rating: 100% (QA)

ANSWER IS Uncovered interest parity UIP states that the difference in interest rates between two cur... View the full answer