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Deriving the Forward Rate Assume that annual interest rates in the United States are 4 percent, whereas interest rates in France are 6 percent. According

  1. Deriving the Forward Rate Assume that annual interest rates in the United States are 4 percent, whereas interest rates in France are 6 percent.

    1. According to IRP, what should the forward rate premium or discount of the euro be?

    2. If the euros spot rate is $1.10 , what should the one-year forward rate of the euro be?

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