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Suppose you observe a spot exchange rate of 3.67 AED/USD. If interest rates are 5% APR in the U.S. and 3% APR in the UAE,

Suppose you observe a spot exchange rate of 3.67 AED/USD. If interest rates are 5% APR in the U.S. and 3% APR in the UAE, what is the no-arbitrage 1-year forward rate?

a. 3.6000 AED/USD

b. 3.7413 AED/USD

c. 3.7234 AED/USD

d. 3.5950 AED/USD

e. 3.6700 AED/USD

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