Solution-What should the one-year forward rate be

What should the one-year forward rate be

Reference no: EM133120568

The current spot exchange rate is $1.1452 per euro.

The one-year dollar interest rate is 1.5%.

The one-year euro interest rate is 0.45%.

What should the one-year forward rate be? Round answer to four places beyond the decimal.

Suppose the forward rate is $1.1620 per euro. Explain how you could earn an arbitrage profit. Begin by borrowing $1,000. Find the profit per $1,000 borrowed.

Reference no: EM133120568

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What should the one-year forward rate be : The current spot exchange rate is $1.1452 per euro. The one-year dollar interest rate is 1.5%. The one-year euro interest rate is 0.45%.

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What should the one-year forward rate be

Reference no: EM133120568

Reference no: EM133120568

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