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Question
The spot exchange rate for the Thai bhat is 33.135 bhat to the dollar or .00318 dollar to the bhat. For capital budgeting purposes, Ramo Corp needs to estimate the exchange rate 5 years from now. The U.S. interest rate is 4%; the interest rate in Thailand is 8%. The estimated 5 year forward rate is:A) 27.44 bhat to the dollar.
B) 40.02 bhat to the dollar.
C) 31.90 bhat to the dollar.
D) 34.41 bhat to the dollar.
Answer
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