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Suppose that the one-year interest rate is 5.0 percent in the United States, the spot exchange rate is $1.20/, and the one-year forward exchange rate
Suppose that the one-year interest rate is 5.0 percent in the United States, the spot exchange rate is $1.20/, and the one-year forward exchange rate is $1.18/. What must one-year interest rate be in the Italy?
Select one:
a.
2.54%
b.
6.78%
c.
4.75%
d.
7.28%
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