D Question 11 Suppose that the current spot exchange rate is 0.80/S and the three-month forward exchange rate is 0.7813/S. The three-month interest rate is 5.60 percent per annum in the United States and 5.40 percent per annum in France. Which of the following is going to happen as a result of covered arbitrage activities toward restoring the interest parity O The E/S spot exchange rate will rise O The euro interest rate will fall The dollar interest rate will fall The E/S forward exchange rate will fall