Use the following to answer the next three questions The current euro/dollar spot exchange rate is 1.6/$. The U.S. interest rate is 4% and the interest rate in the eurozone is 8%. What is the one-year forward rate that should prevail according to IRP? (Assume the US is the home country and round intermediate steps to four decimals.) $.6019/ $1.5408/ $.6491/ $1.6616/ QUESTION 3 Suppose that the one year forward rate is 1.25/S. Find the profit in terms of percentage returns) you could earn via covered interest arbitrage. Round intermediate steps to four decimals. Enter your answer in decimal format. (EX: XXXX) QUESTION 4 Which of the following could occur to eliminate the covered interest arbitrage opportunity? O A decrease in the forward rate for euros in terms of dollars. An decrease in the spot rate for euros in terms of dollars. An increase in the forward rate for euros in terms of dollars. No adjustments are necessary since covered interest arbitrage was not possible