Suppose That the One-Year Interest Rate Is 4

question 64

Multiple Choice

Suppose that the one-year interest rate is 4.0 percent in Italy,the spot exchange rate is $1.60/€,and the one-year forward exchange rate is $1.58/€.What must the one-year interest rate be in the United States?

• A)2%
• B)2.7%
• C)5.32%
• D)none of the options

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