The six-month forward rate be to prevent arbitrage

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Suppose the spot and six-month forward rates on the South Korean won are SKW 1,304.85 and SKW 1,315.08, respectively. The annual risk-free rate in the United States is 5 percent, and the annual risk-free rate in South Korea is 7 percent.

What must the six-month forward rate be to prevent arbitrage? (Do not include the South Korean won sign (SKW). Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

Forward rate

Reference no: EM131558695

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