Homework answers / question archive / The interest rate offered on (Norwegian) Krone is 0

The interest rate offered on (Norwegian) Krone is 0

Finance

Share With

The interest rate offered on (Norwegian) Krone is 0.85%, which is quite low. Given the current Covid-19 pandemic, you expect the Krone to depreciate by 0.3%. For the international Fisher effect (IFE) to hold between Norway and Australia, the Australian interest rate should be ____.

A. 0.55%

B. 0.85%

C. 1.15%

D. 1.85%

E. 2.00%