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Suppose that you know the UK interest rate and the current Euro/pound exchange rate. In addition you know the price of a 1-year at the

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Suppose that you know the UK interest rate and the current Euro/pound exchange rate. In addition you know the price of a 1-year at the money European put and call options on the Euro with the same expiration date. Given the information described above there is only one Euro interest rate that will be consistent with no arbitrage. (10 marks)

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