Suppose That the Spot Exchange Rate for a Foreign Currency

question 30

Essay

Suppose that the spot exchange rate for a foreign currency is equal to $120,while the interest rate in dollars is 2% and the interest rate in the foreign currency is 3%.What is the approximate forward rate that is consistent with this situation?
A)$115.56
B)$124.44
C)$118.77
D)None of the above.

• A)$115.56
• B)$124.44
• C)$118.77
• D)None of the above.

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