For a given foreign currency, if the forward exchange rate of delivery is 20 and the current value of spot exchange rate is 8, then the forward premium will be ______ (rounded off to two decimal places).
GATE 2024 Question 44: Balance of payments and exchange rates
Answer and worked solution
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Balance of payments and exchange rates has come up 120 times in 7 exams since 2007.
What this question tests
This question is on Interest parity: covered and uncovered, part of Balance of payments and exchange rates in International Economics.
How interest differentials and expectations tie exchange rates to interest rates.
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