Assume that one-year interest rates are 4.42% in Australia and 5.25% in the euro zone. The spot rate between the euro an

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answerhappygod
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Assume that one-year interest rates are 4.42% in Australia and 5.25% in the euro zone. The spot rate between the euro an

Post by answerhappygod »

Assume that one-year interest rates are 4.42% in Australia and
5.25% in the euro zone. The spot rate between the euro and the
dollar is €0.9672/A$. Assuming that interest parity holds, what
should the €/$ exchange rate be one year from now? (Express answer
to 4 decimal places)
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