Suppose the Euro/Dollar Exchange Rate is 1 = $1.3640, the annual US riskfree rate is 4.47%, the
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Suppose the Euro/Dollar Exchange Rate is €1 = $1.3640, the annual US riskfree rate is 4.47%, the US inflation rate is 2.69%, the annual Eurozone riskfree rate is 4.27%, the Eurozone inflation rate is 1.90%, and the one-year Forward Euro/Dollar Exchange Rate is €1 = $1.3739. What will the Euro/Dollar Exchange Rate be in one-year, two-years, three-years, four-years, and five-years?
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