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Suppose that the one-year interest rate is 5.27% in Italy, the spot exchange rate is $1.4041/1.00, and the one-year forward exchange rate is $1.3693/1.00. Based
Suppose that the one-year interest rate is 5.27% in Italy, the spot exchange rate is $1.4041/1.00, and the one-year forward exchange rate is $1.3693/1.00. Based on interest rate parity, what must the one-year interest rate be in the United States? 5.567% 9.375% 7.945% 2.661% 7.361% 2.541%
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