Rate trading at premium or discount relative to spot rate

Assignment Help Financial Management

Reference no: EM13921243

Assume that interest rate parity holds and that 90-day risk-free securities yield 6% in the United States and 6.3% in Germany. In the spot market, 1 euro equals $1.40 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: EM13921243

Questions Cloud

The coupon payments are made semi-annually : XYZ, Inc. is planning to offer a $1000 face value 10-year bond with a coupon rate of 8%. The coupon payments are made semi-annually. If you require a 10 percent rate of return, what is the price you would pay for this bond?

Ow residents of state might be made worse off by such a law : Discuss how the residents of the state might be made worse off by such a law. How do you expect the teaching loads to vary across the two states (you can focus on history and law departments)?

Construct a high - level use case diagram : Data Model detailing the data structure required to support the current information and process requirements - Identify the main classes and represent these in a UML class diagram showing classes and their methods, attributes and relationships betwe..

Summarize the major provisions of the law : Summarize the major provisions of the law that you chose. Describe the economic impact of the law. Provide specific economic data from credible references. Has the law improved the environment or situation? Provide specific data from credible referen..

Rate trading at premium or discount relative to spot rate : Assume that interest rate parity holds and that 90-day risk-free securities yield 6% in the United States and 6.3% in Germany. In the spot market, 1 euro equals $1.40 dollar. Is the 90-day forward rate trading at a premium or discount relative to the..

Is there evidence for god : Read the "Is There Evidence For God? William Lane Craig vs. Lawrence Krauss debate. Write a 3 page 12-point double-spaced paper where you summarize (do not quote) the best argument for the theistic side and the best argument for the atheistic side

Discuss the negative and positive aspects of such a policy : Some companies base promotions solely on seniority. Discuss the negative and positive aspects of such a policy. How would you expect a large increase in the minimum wage to affect the pay package offered by employers?

Retail investors picking stock underperform index : Retail investors picking stock underperform index by 1.5% per year. Total returns on market index is 7.5%. Suppose I start with 1000$ today and invest for 50 years. Let x be real dollars I have at end of 50 years put in market. Let y be real dollars...

Social disorganization relate to organized crime : What is social disorganization? How does social disorganization relate to organized crime and its evolution?

User Account

All Pages