Question: Problem 2 : Uncovered Interest Rate Parity Suppose the current spot exchange rate is 1 . 2 EUR / USD . The U . S

Problem 2: Uncovered Interest Rate Parity Suppose the current spot exchange rate is 1.2 EUR/USD. The U.S. interest rate is \(3\%\), and the Eurozone interest rate is \(4\%\). What is the expected future spot exchange rate after one year if uncovered interest rate parity holds?
Problem 2 : Uncovered Interest Rate Parity

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