QUESTION 13.2 Imagine you have €100.000 and want to invest it in the foreign exchange market. After conducting an extensive analysis, you conclude what the exchange rates will be one year ahead. The following table gives both the spot exchange rate of the amount of foreign currency per euro and the expected exchange rate in one year.

13.2A Explain in which currency you want to invest. 13.2B How many euros do you expect to have in one year?

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Australian dollar British pound Japanese yen US dollar Spot rate Expected future rate 1.71 1.77 0.69 0.72 135.2 130.0 1.27 1.24