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What is the spot exchange rate

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Reference no: EM132143785

Suppose that the forward rate F at 6 months between $ and Euro is

  • Euro = $1.2

The interest rate at six months in the Euro Area and in the USA is

  • iEuro=3%
  • iUSA=2%

What is the spot exchange rate?

[x]

a.Euro = $1.21

b.Euro = $1

c.$ = Euro 1

d.Euro = $1.18

Reference no: EM132143785

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