The US dollar-euro spot exchange rate is $1.50/€. If the one-year simple interest rate on dollars is 1% and on euro is 2%, what is the one-year forward rate of dollars per euro?
A) 1.4748
B) 1.4853
C) 1.5000
D) 1.5149

Name: The US dollar-euro spot exchange rate is $1.50/€. If the one-year simple interest rate on dollars is 1% and on euro is 2%, what is the one-year forward rate of dollars per euro? A) 1.4748 B) 1.4853 C) 1.5000 D) 1.5149
Brand: Quizplus
Rating: 4.7 (40 reviews)

Question

The US dollar-euro spot exchange rate is $1.50/€. If the one-year simple interest rate on dollars is 1% and on euro is 2%, what is the one-year forward rate of dollars per euro? 
A) 1.4748
B) 1.4853
C) 1.5000
D) 1.5149

Quizplus · Accepted Answer

The Answer is B

The US Dollar-Euro Spot Exchange Rate Is $1