5 Questions for next class The current EUR/USD exchange rate is 1.10. The current European interest rate (c.c.) is -0.4% (!), and the current USD interest rate (c.c) is 0.8%. The volatility of the EUR/USD exchange rate is something like 15%. 1. What is the 3 month forward EUR/USD exchange rate? 2. Which currency is (expected to be) getting stronger? 3. If you thought the forward EUR/USD exchange rate was too high, would you prefer a 3 month call on 10,000 Euros or a 3 month put on 10,000 Euros (both struck at the forward exchange rate from 1))? 4. What would your option of choice cost you? 5. What would the actual exchange rate have to be (in 3 months time) for you to bronk quon?