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On a particular date, the spot exchange rate between U.S. $ and the euro was$1.10/, the one-year US$ LIBOR interest rate was 2.50% and the
On a particular date, the spot exchange rate between U.S. $ and the euro was$1.10/, the one-year US$ LIBOR interest rate was 2.50% and the one-year euro LIBOR interest rate was 0.50%. If the interest rate parity (the exact formula) holds, what is the forward exchange rate between U.S. $ and the euro (dollars per euro)? Answer $____/ (U.S. dollars per euro)
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