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Suppose that the one-year interest rate is 4.50% in Italy, the spot exchange rate is $1.5656/ 1.00, and the one-year forward exchange rate is $1.6002/1.00.

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Suppose that the one-year interest rate is 4.50% in Italy, the spot exchange rate is $1.5656/ 1.00, and the one-year forward exchange rate is $1.6002/1.00. Based on interest rate parity, what must the one-year interest rate be in the United States? 6.809% 2.191% 2.162% 3.875% 3.046% 2.240%

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