Question: The current exchange rate is $1.6 = 1 Interest rate in the US = 9% Interest rate in Europe = 6% Find the 6-month forward

The current exchange rate is $1.6 = €1

Interest rate in the US = 9%

Interest rate in Europe = 6%

Find the 6-month forward rate. Use the covered interest parity formula.

Is the US dollar a forward discount or premium?

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