If the current exchange rate between the Swedish krona and the US dollar is USD/SEK10.500 and the one-year risk-free interest rates are 3.457% for the Swedish krona and 4.982% for the US dollar, what is the no-arbitrage one-year USD/SEK forward rate?
A USD/SEK9.990
B USD/SEK10.3403
C USD/SEK10.6613
解析：
The correct response is B. To avoid arbitrage opportunities in exchanging Swedish kronor and US dollars, investors must be able to lock in a one-year forward exchange rate of USD/SEK 10.3403 today. The steps to achieve this are as follows:
To prevent arbitrage, the one-year forward exchange rate must equal 10.3406.
Response A is incorrect because it applies the interest only to the USD1. Specifically, it calculates
Response C is incorrect because it reverses the interest rates in the calculation.
