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What is the current one-year interest rate of hkd

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Reference no: EM132818370

Suppose the spot exchange rate is NZD/HKD is 0.2000. The NZD one-year interest rate is 6%. One year forward rate is NZD/HKD 0.1923.

(a) What is the current one-year interest rate of HKD?

(b) Based on your answer in (a), what will happen when you find out the HKD interest rate is 12%? State clearly how would you perform.

Reference no: EM132818370

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