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The current USD/euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is 1.4050. The six month USD interest rate is

The current USD/euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is 1.4050. The six month USD interest rate is 1.9% per annum continuously compounded. Estimate the six month euro interest rate. (Please round your answer to four decimal places) p.s I don't get what the r we use in the formula come from and what it represent

QUESTION 3 The current USD/euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is 1.4050. The six month USD interest rate is 1.9% per annum continuously compounded. Estimate the six month euro interest rate. (Please round your answer to four decimal places)

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