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If the current spot exchange rate is $1.207/euro, but the 6-month futures rate is $1.184/euro, while the U.S. is offering a 6-month bond with an
If the current spot exchange rate is $1.207/euro, but the 6-month futures rate is $1.184/euro, while the U.S. is offering a 6-month bond with an annualized interest rate of 6.8%, what interest rate should an otherwise comparable euro-denominated bond offer? Assume that all of the parity conditions from class hold. Give your answer as a percent to one decimal point (for example, if your answer is 4.564%, enter 4.6).
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