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.
Chapter1: Making Economics Decisions
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb265eb1e-b563-47ba-b2ce-7a83972697c0%2F8d2aa626-4856-4c73-bf18-1a40cd9f7c8d%2Fd3dhdrw_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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