Approximately what exchangerate will the returns

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Assume that the U.S. interest rate is 5%, the European interest rate is 2%, andthe future expected exchange rate in 1 year is $1.224.

If the spot rate is $1.16, then the expected dollar return on euro deposits is:

At approximately what exchangerate will the returns between the United States and Europe be equalized?

Reference no: EM131393808

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