Multiple Choice
Suppose you observe the spot euro at $1.50/€, the U. S. risk-free interest rate of 3.25% (continuously compounded) , and the six month futures price of $1.50/€. Identify the correct implied European risk-free interst rate (select the closest answer) .
A) -3.25%
B) -1.0%
C) 0.0%
D) 1.0%
E) 3.25%
Correct Answer:
Verified
Correct Answer:
Verified
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