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Interest rate in US (Rh): 3.5% Interest rate in Euro zone (Rh): 7.5% The spot rate of EUR, now (SR0): $1.25 According to International Fisher

Interest rate in US (Rh): 3.5%
Interest rate in Euro zone (Rh): 7.5%
The spot rate of EUR, now (SR0): $1.25

According to International Fisher Effect (IFE), the spot rate for EUR should change by:

Correct answer 3.86%

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