Compute the forward rate achievable in a synthetic year

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The interest rates (bid and offered) in the U. S. are 2.5% and 2.75%. The corresponding rates in Germany are 1.5% and 1.6%.

The spot exchange rate is quoted as $1.25 (bid) - $1.28 (ask) per euro.

Compute the forward rate (dollars per euro) achievable in a synthetic one year forward contract to buy euros with dollars.

Round the answer to four decimal places and enter it without the currency symbol.

Reference no: EM131928433

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