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Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.81 and...

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Finance

Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.81 and Kr 5.96, respectively. The annual risk-free rate in the United States is 3.61 percent, and the annual risk-free rate in Norway is 5.31 percent.

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Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.81 and Kr 5.96, respectively. The annual risk-free rate in the United States is 3.61 percent, and the annual risk-free rate in Norway is 5.31 percent. Using the approximation, the six-month forward rate on the Norwegian krone would have to be kr/$ to prevent arbitrage. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

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