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The euro is currently trading at 1.20 euros per dollar. The interest rate on the US Treasury Bill is 0.029 and the risk free interest rate in Europe...

The euro is currently trading at 1.20 euros per dollar. The interest rate on the US Treasury Bill is 0.029 and the risk free interest rate in Europe is 0.014. What is the arbitrage free future exchange rate between the euro and the U.S. dollar for two years in the future in euros per dollar?

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Answer to the question future exchange rate of US $ after 2 years is 1.2623 Euro s Given euro / us $ = 1.30 Interst rate in... View the full answer

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