Assume the 5-year interest rate in US is 5.5% and the interest rate is 7.5% in Germany.

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Assume the 5-year interest rate in US is 5.5% and the interest rate is 7.5% in Germany. If the current spot rate is $1.08/€, what is the value of the forward exchange rate that prevents covered interest arbitrage?

0.9832

0.9375

0.9914

0.9564

Related Book For answer-question

International Economics

ISBN: 978-0073523170

15th edition

Authors: Thomas A. Pugel

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Posted Date: Jun 16, 2022 07:20 AM

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Assume the 5-year interest rate in US is 5.5% and the interest rate is 7.5% in Germany.

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International Economics

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