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Suppose that the EUR/USD spot exchange rate is EeuRso =0.95 and that a 12-month forward contract is available at a price of 180 forward points.

Suppose that the EUR/USD spot exchange rate is EeuRso =0.95 and that a 12-month forward contract is available at a price of 180 forward points. Calculate the 12-month forward rate and discuss whether the market expects an appreciation or a depreciation of the Euro with respect to the US dollar.

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