What would the foreign interest rate need to be to achieve interest rate parity if the domestic interest rate is 5%, the forward rate is 1.48 and the spot rate is 1.5?
A: 6%
B: 8%
C: 7%
D: 2%
A: 6%
B: 8%
C: 7%
D: 2%
举一反三
- The interest rate can be divided into spot interest rate and forward interest rate according to the time of interest calculation.
- If the domestic interest rate decreases, with the foreign interest rate and the expected future spot rate remaining unchanged, the value of the domestic currency vis-à-vis the foreign currency is expected to:
- According to the interest rate parity theory, when the forward foreign exchange rate is premium, it means that the domestic interest rate( ) A: is equal to the foreign exchange rate B: lower than foreign exchange rates C: higher than foreign exchange rates D: Not sure
- According to the interest rate parity theory, the forward currency of countries with a lower interest rate will appreciate.
- If the nominal interest rate is 5% and the inflation rate is 2%, then the real interest rate is 7%.