Suppose That the One-Year Interest Rate Is 5

question 76

Multiple Choice

Suppose that the one-year interest rate is 5.0 percent in the United States and 3.5 percent in Germany,and the one-year forward exchange rate is $1.16/€.What must the spot exchange rate be?

• A)$1.1768/€
• B)$1.1434/€
• C)$1.12/€
• D)none of the options

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Definitions:

Costs of Incarceration

The economic and social expenses associated with maintaining prison systems and the long-term impact on incarcerated individuals and society.

Debtors

Individuals or entities that owe money to another party. This can relate to various sectors including loans, credit, or other financial obligations.

War on Drugs

A campaign led by governments aimed at reducing the illegal drug trade.

Criminal Justice System

The network of government institutions and practices responsible for upholding social control, deterring crime, and sanctioning those who violate laws with criminal penalties.