Suppose That the One-Year U

question 30

Multiple Choice

Suppose that the one-year U.S.interest rate is 8% and the equivalent one-year U.K.interest rate is 10%.According to the covered interest rate parity,there is a ________ on the U.S dollar.

• A) 2% forward discount
• B) 2% forward premium
• C) 18% forward discount
• D) 18% forward premium

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