Suppose European interest rates are 4%, and the current spot rate is 1 Euro = 1.25 US

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Suppose European interest rates are 4%, and the current spot rate is 1 Euro = 1.25 US Dollars and forward rate is 1 Euro = 1.30 US Dollars. According to interest rate parity, what is the equilibrium US interest rate? Give your answer as a percent and to the nearest 0.01%.

Posted Date: Jul 02, 2024 06:02 AM

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Suppose European interest rates are 4%, and the current spot rate is 1 Euro = 1.25 US

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