Question: Using below information for question1 and 2 Current spot rate EUR1 = USD 1.55 Annual interest rate in EU: 4% Annual interest rate in US:

Using below information for question1 and 2 Current spot rate EUR1 = USD 1.55 Annual interest rate in EU: 4% Annual interest rate in US: 1% Forward rate of EUR1: 1.7

Question 1 Applying IRP theory, what Should be the expected forward premium or forward discount of EUR If forward premium of 9.12%, put 9.12 in the answer If forward discount of 9.12%, put -9.12 (Negative number) in the answer

Applying IRP theory, what Should be the fair forward rate for EUR Include 4 number after decimal place in your answer

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