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Suppose that IRP holds true. The US 1-year interest rate is 5%. The spot rate is $1.20 per euro, and the forward 1-year rate is

Suppose that IRP holds true. The US 1-year interest rate is 5%. The spot rate is $1.20 per euro, and the forward 1-year rate is $1.16 per euro. What must the 1-year interest rate be in the euro zone? 8.62% 5.0% None of the above 1.09%

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