Annual Interest Rates Are 6% in Euros and 5% in Dollars

question 7

Multiple Choice

Annual interest rates are 6% in euros and 5% in dollars. The spot rate is S₀^$/€ = $1.20/€. What is the one-year forward exchange rate?

• A) $1.18/€
• B) $1.19/€
• C) $1.20/€
• D) $1.21/€
• E) $1.22/€

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Definitions:

Consequentialism

An ethical theory that judges whether something is right based on its consequences.

Planetary Management

An approach to governance that emphasizes the active management of Earth's resources and systems for sustainable human development while considering the needs of future generations.

Blind Technological Optimism

The belief in technology as a solution for all problems, without consideration for potential negative impacts or failures.

Sustainable Living

A lifestyle that seeks to reduce an individual's or society's use of the Earth's natural resources and personal resources to minimize environmental impact.