The U.S. risk-free interest rate is 2.4% per year, the spot exchange rate is $1.35 per euro, and the one-year forward exchange rate is $1.34 per euro. If interest rate parity holds, what is the annual European risk-free interest rate? 1) 3.6% G O2) 1.9% 3) 3.2% 4) 2.7% 5) 1.6%