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Suppose you observe a spot exchange rate of $1.0500/. If interest rates are 5% APR in the U.S. and 3% APR in the euro zone,

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Suppose you observe a spot exchange rate of $1.0500/. If interest rates are 5% APR in the U.S. and 3% APR in the euro zone, what is the no-arbitrage 4 month forward rate? Based on IRP, what should the theoretical Forward rate be? HINT: Solve for Fusing the IRP Formula

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