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On September 5, 2013, the one-year forward premium for the Argentine peso against the U. dollar was -39.The spot exchange rate on that day was 5.7088...
On September 5, 2013, the one-year forward premium for the Argentine peso against the U.S. dollar was -39.3%. The spot exchange rate on that day was 5.7088 pesos per dollar. According to interest rate parity, what was the one-year forward exchange rate on that day?
a.3.4652 pesos per dollar
b.7.9523 pesos per dollar
c.0.1063 pesos per dollar
d.9.4049 pesos per dollar
On September 5, 2013, the one-year forward premium for the Argentine peso against the U.S. dollar was -39.3%. The spot exchange rate on that day was 5.7088 pesos per dollar. Which of the following is NOT true according to the international parity conditions?
a.The peso was expected to depreciate against the dollar in one year.
b.The real return for peso investment was expected to be higher than that for the dollar.
c.The peso interest rate must be higher than the dollar interest rate.
d.The peso inflation rate must be higher than the dollar inflation rate.
