Assume that interest rate parity holds

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Assume that interest rate parity holds and that 90-day risk-free securities yield 3% in the United States and 3.6% in Germany. In the spot market, 1 euro equals $1.38 dollar. Is the 90-day forward rate trading at a premium or discount relative to the spot rate? What is the 90-day forward rate? Round your answer to four decimal places.

Reference no: EM13913619

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