t6 Suppose that the spot rate on the Euro is $1.35 and the 180-day forward rate is St difference between the spot and forward rates sugsests that a interest rates are higher in the U.S. than in the Euro zone b. the Euro has risen in relation to the dollar c the inlation rate in the Euro zone has been declining d the Euro is expected to fall in value relative to the dollar 17, Suppose that the one-year interest rate is 5.0 percent in the United States, the spo rate is $1.20 E, and the one-year forward exchange rate is S1.16/. What must one-y rate be in the euro zone? a, 5.0% b. 6.09% C, 8.62% d. None of the above 18. When Interest Rate Parity (IRP) holds a there is usually a high degree of inflation in at least one country b. the financial markets are not in equilibrium c. there are no opportunities for covered interest arbitrage d. band c