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What is the 90-day forward rate

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Reference no: EM131106739

Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.3% in Britain. In the spot market, 1 pound = $2.

a. Is the 90-day forward rate trading at a premium or a discount relative to the spot rate?

b. What is the 90-day forward rate?

Reference no: EM131106739

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