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Business, 06.03.2020 19:03 cabrerafreddy780

(Interest rate parity) Suppose 90-day investments in Europe have an annualized return of 5 percent and a quarterly (90-day) return of 1.25 percent. In the United States, 90-day investments of similar risk have an annualized return of 7 percent and a quarterly return of 1.75 percent. In today's 90-day forward market, 1 euro equals $ 1.33. If interest rate parity holds, what is the spot exchange rate ($/euro)? If interest rate parity holds, the spot exchange rate is nothing $/euro. (Round to four decimal places.)

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(Interest rate parity) Suppose 90-day investments in Europe have an annualized return of 5 percent a...
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