Question

If the current exchange rate for the Norwegian krona is NOK 8.5000/$ and the interest rate on a three-month Norwegian government bond is 6% and the interest rate on the U.S. equivalent is 2%, applying interest rate parity, what should the NOK/$ exchange rate be in three months’ time?

Question 23 options:

	NOK 8.5846/$
	NOK 8.8333/$
	NOK 8.1793/$
	NOK 8.4163/$

Answer 1

Ans is NOK 8.8333/$

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