Question
The euro is currently trading at 0.90 euros per dollar. The interest rate on the US Treasury Bill is 0.011 and the risk free interest
The euro is currently trading at 0.90 euros per dollar. The interest rate on the US Treasury Bill is 0.011 and the risk free interest rate in Europe is 0.002. What is the arbitrage free future exchange rate between the euro and the U.S. dollar for two years in the future in euros per dollar?
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Financial Management for Public, Health and Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
5th edition
1506326846, 9781506326863, 1506326862, 978-1506326849
