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Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.87 and Kr 6.02, respectively. The annual risk-free rate in the United States is 3.67 percent, and the annual risk-free rate in Norway is 5.37 percent.

Using the approximation, the six-month forward rate on the Norwegian krone would have to be Kr/$ _________ to prevent arbitrage. (Do not round intermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616.)

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Financial Management, Finance

Category:- Financial Management
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