Suppose that the one-year interest rate is 6.65% in the United States and 5.23% in Germany. The spot exchange rate is $1.2336/€1.00. What should the one-year forward rate be to preclude arbitrage profits? $1.3827/€1.00 $1.0528/€1.00 $1.2503/€1.00 $1.2171/€1.00 $1.3156/€1.00 $1.2981/€1.00

Q&A Education