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a) An analyst is examining the exchange rate between the US dollar and the euro and is given the following information regarding the EUR/USD exchange

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a) An analyst is examining the exchange rate between the US dollar and the euro and is given the following information regarding the EUR/USD exchange rate and the respective risk- free interest rates: Current EUR/USD exchange rate: 1.18 Current USD-denominated 1-year risk-free interest rate: 2.5% per year Current EUR-denominated 1-year risk-free interest rate: 1.5% per year According to the interest rate parity theorem, what is the 1-year forward EUR/USD exchange rate

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