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Suppose that the one year interest rate is 2.5 percent in the United States the spot exchange rate is $1. 1634/ and the one year

Suppose that the one year interest rate is 2.5 percent in the United States the spot exchange rate is $1. 1634/ and the one year forward exchange rate is $1. 1248/8. What must one year interest rate be in the euro zone to avoid arbitrage? Answer Format: Round to four decimals. Example: 1.1234

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