The spot exchange rate for the Thai bhat is 30.000 bhat to the dollar or .00333...

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The spot exchange rate for the Thai bhat is 30.000 bhat to thedollar or .00333 dollar to the bhat. For capital budgetingpurposes, Ramo Corp needs to estimate the exchange rate 5 yearsfrom now. The U.S. interest rate is 2%; the interest rate inThailand is 6%. Calculate The estimated 5 year forward rate betweenthe 2 currencies.
Please show all works and steps

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Solution As per the Interest rate Parity model Exchange rate differential Interest rate differential Forward Rate Spot Rate 1 Interest Rate in Home Currency 1 See Answer

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The spot exchange rate for the Thai bhat is 30.000 bhat to thedollar or .00333 dollar to the bhat. For capital budgetingpurposes, Ramo Corp needs to estimate the exchange rate 5 yearsfrom now. The U.S. interest rate is 2%; the interest rate inThailand is 6%. Calculate The estimated 5 year forward rate betweenthe 2 currencies.Please show all works and steps