Suppose That the One-Year Interest Rate Is 3

question 55

Multiple Choice

Suppose that the one-year interest rate is 3.0 percent in Italy,the spot exchange rate is $1.20/€,and the one-year forward exchange rate is $1.18/€.What must the one-year interest rate be in the United States?

• A)1.2833%
• B)1.0128%
• C)4.75%
• D)none of the options

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