Today's Spot Exchange Rate S_A Is $1

Multiple Choice

Today's spot exchange rate S_A is $1.30 per euro in American terms.The continuously compounded annual risk-free interest rates are r = 4 percent in the United States (domestic) and r_E = 3 percent in the Eurozone.Then a trader using the cost-of-carry model will quote the six-month forward rate in American terms as:

A) $1.2107
B) $1.3005
C) $1.3065
D) $1.3508
E) None of these answers are correct.