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as f today the spot exchange rate is 1 167 As of today, the spot exchange rate is 1.00 = $1.25 and the rates of

as f today the spot exchange rate is 1
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167 As of today, the spot exchange rate is 1.00 = $1.25 and the rates of inflation expected to prevail for the next year in the U.S. is 2% and 3% in the euro zone. What is the one-year forward rate that should prevail? a) b) c) d) Answer: a) 1.00=$1.2379 1.00=$1.2623 1.00=$0.9903 $1.00=1.2623

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