Question: In the table below, exchange rate is defined as US dollars per Euro, E$/. Given the information below, using UIP (in approximate form), fill in
In the table below, exchange rate is defined as US dollars per Euro, E$/. Given the information below, using UIP (in approximate form), fill in the blanks marked with letters. Round your answers to 3 decimals. Interest Rate on Dollar Deposit (annual) Interest Rate on Euro Deposit (annual) Spot Exchange Rate, E$/ (today) Expected Future Exchange Rate, Ee$/ (in one year) Expected Rate of Change in Exchange Rate (Ee$/-E$/)/E$/ Expected Dollar Return on Euro Deposit (annual) Investors Prefer 0.025 (2.5%) 0.005 (0.5%) 1.10 1.326 0.205 (20.5%) 0.21 A 0.025 0.005 (0.5%) B 1.326 0.105 C D 0.025 0.005 E 1.326 F G Indifferent 0.025 0.005 1.4 1.326 H I J
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