Suppose That the One-Year U

question 8

Multiple Choice

Suppose that the one-year U.S.interest rate is 5% and the equivalent one-year Swiss interest rate is 4%.According to the covered interest rate parity,there is a ________ on the Swiss franc.

• A) 1% forward discount
• B) 1% forward premium
• C) 9% forward discount
• D) Forward flat

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