1.2 ot Question 5 Given the information below, calculate the interest on Euro assets assuming that the uncovered interes

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1 2 Ot Question 5 Given The Information Below Calculate The Interest On Euro Assets Assuming That The Uncovered Interes 1 (23.22 KiB) Viewed 39 times

1.2 ot Question 5 Given the information below, calculate the interest on Euro assets assuming that the uncovered interest parity holds. The spot exchange rate Eg/e=1.6 Dollar interest rate Euro interest rate Expected future spot exchange rate R₂ Re Esje 10% XI 1.64 125 X2 1.512 8% X3 1.600 Selected Answer: C. X1, X2 X3 = 7.5%: 17.5%: 8% Answers A X1: X2 X3 = 1%; 12%: 8% 8, X1, X2, X3-7.5%: 27.5%;8% CX1: X2, X3-7.5%; 17.5%;8% DX1: X2 X3 12.5%: 6.5%: 8% EX1, X2, X3-9%; 17.5%; 8%