Question: Looking for help for this 2 questions If the positive interest rate differential in favor of a foreign monetary center is 4 percent per year
Looking for help for this 2 questionsIf the positive interest rate differential in favor of a foreign monetary center is 4 percent per year and the foreign currency is at a forward discount of 2 percent per year, roughly how much would an investor earn from the purchase of foreign three-month treasury bills if he or she covered the foreign exchange risk? For the given of Problem 9, indicate: How much would an investor earn if the foreign currency were at a forward premium of 1 percent per year? What would happen if the foreign currency were at a forward discount of 6 percent per year
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