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Suppose That the One-Year Interest Rate Is 5

Question 76

Multiple Choice

Suppose that the one-year interest rate is 5.0 percent in the United States and 3.5 percent in Germany,and the one-year forward exchange rate is $1.16/€.What must the spot exchange rate be?


A) $1.1768/€
B) $1.1434/€
C) $1.12/€
D) none of the options

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