Multiple Choice
As of today, the spot exchange rate is €1.00 = $1.25 and the rates of inflation expected to prevail for the next year in the U.S. is 2% and 3% in the euro zone. What is the one-year forward rate that should prevail?
A) €1.00 = $1.2379
B) €1.00 = $1.2623
C) €1.00 = $0.9903
D) $1.00 = €1.2623
Correct Answer:
Verified
Correct Answer:
Verified
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