The current USD/euro exchange rate is 1.127 dollar per euro. The six month forward exchange rate is 1.117. The six month USD interest rate is 1.41% per annum continuously compounded. Estimate the six month euro interest rate (in percent). Use three decimal places for your answer.

The current USD/euro exchange rate is 1.127 dollar per euro. The six month forward exchange rate is 1.117. The six month USD interest rate is 1.41% per annum continuously compounded. Estimate the six month euro interest rate (in percent). Use three decimal places for your answer.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Financial Statements

Financial statements (or financial reports) are the formal records of the financial activities that are undertaken by a firm. They are convenient instruments used for analyzing a company’s financial position and performance. Financial ratios are created with the help of the numerical values that are derived from the financial statements. They give meaningful information about the financial performance of the company.

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The current USD/euro exchange rate is
1.127 dollar per euro. The six month
forward exchange rate is 1.117. The six
month USD interest rate is 1.41% per
annum continuously compounded.
Estimate the six month euro interest rate
(in percent). Use three decimal places for
your answer.
answer: 3.193

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