Suppose that the one-year interest rate is 4.30% in Italy, the spot exchange rate is $1.5550/€1.00,...

Suppose that the one-year interest rate is 4.30% in Italy, the spot exchange rate is $1.5550/€1.00, and the one-year forward exchange rate is $1.5979/€1.00. Based on interest rate parity, what must the one-year interest rate be in the United States?

Question 19 options:

	1.832%
	1.935%
	1.500%
	7.177%
	1.478%
	2.685%

Solutions

Expert Solution

jeff jeffy answered 2 months ago

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