Question: The one - year interest rate in the U . S . is i $ = 2 % and in the euro zone the one

The one-year interest rate in the U.S. is i$=2% and in the euro zone the one-year interest rate is i=6%. The one-year forward exchange rate is $1.1586=1.00; what must the spot rate be to eliminate arbitrage opportunities?
a) $1.2471=1.00
b) $1.2235=1.00
c) $1.2040=1.00
d) none of the above
 The one-year interest rate in the U.S. is i$=2% and in

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