If the current spot rate is $1.5995/EUR, the 12-month forward rate is $1.6047/EUR. The interest rate is 10% on one-year German guaranteed investment certificates (GIC) . Using the forward contract, what is the real return for such an investment over this one-year period?
A) 8.27%
B) 9.39%
C) 10.36%
D) 10.85%
E) 11.32%
Correct Answer:
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