What is the spot exchange rate

Reference no: EM131488909

Question: (Interest rate parity) Suppose 90-day investments in Poland have a 2 percent annualized return and a 0.5 percent quarterly (90-day) return. In India, 90-day investments of similar risk have a 7 percent annualized return and a 1.75 percent quarterly return. In the current 90-day forward market, 1 Polish zloty (PLN) equals 16 Indian rupees (INR). If interest rate parity holds, what is the spot exchange rate (PLZ/INR)?

Reference no: EM131488909

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