As of today (3/9/2022), the euro is trade at $1.1070/. The interest rate for US government bonds, cited at the same time, is 1.932% (per year), while that for the Eurozone countries (e.g., Germany) is 0.218%.

a. What do you expect the spot rate one year later (i.e., March 2023) will be? Explain Why

c. Which theory do you apply for your forecasting?

d. Is the Euro traded at a forward premium or discount?

e. Discuss whether the euro futures are traded consistently with your forecasted value or not.