Are the euro, yen and Canadian dollar trading at a premium or discount to the U.S....

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Are the euro, yen and Canadian dollar trading at a premium or discount to the U.S....

Are the euro, yen and Canadian dollar trading at a premium or discount to the U.S. dollar? What are indicative interest rates in each of those countries? Use T-Bills from their treasury rates.

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Answer 1

Answer #1

Currency is at premium or discount compared to us dollar can be identifed by comparing spot rate to future rate . We have to identify for each currency like( euro, yen and canadian ) respectively to identify currency is at premium or discount.

Indicative interest rate means interest rate considering certain cost associated with setting up loan,loan approval fees and any other fees . We can get indicative interest rate with help of comparison rate chart

TBills are the treasurey to raise money by government in form of issuing tbills at discounted price and on its maturity holder get par price.

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Answer 2

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