What is the annual rate of interest on six month deposits

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Assume that Interest Rate Parity holds. The spot rate for the Euro is $1.20. The six month forward rate for the Euro is $1.23 and the one year forward rate is $1.25. The annual rate of interest in the United States on six month deposits is 9.1%. What is the annual rate of interest on six month deposits in Germany? Also, please do not approximate.

Reference no: EM131328333

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