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Suppose that the one-year interest rate is 3.0 percent in Italy, the spot exchange rate is $1.20/, and the one-year forward exchange rate is $1.18/.

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Suppose that the one-year interest rate is 3.0 percent in Italy, the spot exchange rate is $1.20/, and the one-year forward exchange rate is $1.18/. What must the oneyear interest rate be in the United States? 4.75% 1.2833% none of the options 1.0128%

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