1. What does the evidence in Table 2.4 indicate about the expected futur e value of the Euro relative to the dollar?

Annualized forward premium or discount- (F-50) (12) (100%) . Table 2.2 Spot Foreign Exchange Rate:s Exchange Rate (US. Dollars November IS, 2001 February 20, 2004 Countr Australia Britain Canada India Japan South Africa Switzerland Currenc $0.7703 $1.8601 Dollar Pound Dollar Rupee Yen Rand Franc $0.5183 $1.4322 $0.6302 $0.02084 $0.008173 $0.1046 $0.6020 $0.8819 $0.7480 $0.02209 $0.009167 $0.1491 $0.7931 $1.2524 European Unio Euro European Union Euro Source: The Wal Steet Journal (November 6.2001, and February 23, 2004) Table 2.3 Forward Foreign Exchange Rates Exchange Rate (U.S. Dollars) February 20, 2004 I-Month Forward 3-Month Forward 6-Month Forward Cu British pound Canadian dollar Japanese yen Swiss franc $1.8556 $1.8461 $1.8315 0.7472 0.00917 0.7937 0.7457 0.009192 0.7948 0.7439 0.009220 0.7965 Source: The Woll Street Joumal (February 23, 2004)