Question
Assume the following information is available for the U.S. and Europe: U.S. Europe Nominal one-year interest rate 5.20% 4.10% Expected inflation 4.50% 2.25% Spot rate
Assume the following information is available for the U.S. and Europe: U.S. Europe Nominal one-year interest rate 5.20% 4.10% Expected inflation 4.50% 2.25% Spot rate ----- $1.1100/euro
What shall the one-year forward rate for euro be if the interest rate parity holds?
$1.1344/euro.
$1.0984/euro.
$1.1217/euro.
$1.0861/euro.
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Remittances And International Development
Authors: Sabith Khan, Daisha Merritt
1st Edition
0367521881, 978-0367521882
