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If the current Dollar Euro spot rate is 1 . 1 0 US Dollar per Euro, and the 1 year Euro Libor is 4 %

If the current Dollar Euro spot rate is

1.10

US Dollar per Euro, and the

1

year Euro Libor is

4 %

APR and the

1

year USD Libor is

5 %

APR, then the unbiased

1

year Dollar Euro forward rate is

q,

Dollars per Euro.

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