As of Today,the Spot Exchange Rate Is €1

question 11

Multiple Choice

As of today,the spot exchange rate is €1.00 = $1.25 and the rates of inflation expected to prevail for the next year in the U.S.is 2 percent and 3 percent in the euro zone.What is the one-year forward rate that should prevail?

• A)€1.00 = $1.2379
• B)€1.00 = $1.2623
• C)€1.00 = $0.9903
• D)$1.00 = €1.2623

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