What is the breakeven spot exchange rate next year

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Reference no: EM131907117

1. If the pound interest rate is 1% p.a., and the dollar interest rate is 5% p.a., what is the magnitude of the forward premium or discount for the pound? (positive for premium and negative for discount)

2.The current spot rate is $1.15 per euro. The interest rate in Germany is 2% p. a. and the interest rate in the U. S. is 4% p.a. What is the breakeven spot exchange rate next year for a speculator?

Reference no: EM131907117

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