### What are the implied interest rates

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Suppose the spot price for Euro is \$1.15, the futures price for delivery in 6 months is \$1.1471286. Assume that the 6 month borrowing/lending rate in Euro is 0.75percent (annually, continuous compounding) and the corresponding rate in \$ is 0.25percent (annually, continuous compounding).

(This is an FX application using the same cost of carry model).

What are the implied interest rates in Europe and the U.S.?

### Previous Q& A

#### Application using the same cost of carry model

Suppose the spot price for Euro is \$1.15, the futures price for delivery in 6 months is \$1.1471286. Assume that the 6 month borrowing/lending rate in Euro is 0.75percent (annually, continuous compounding) and the corresponding rate in \$ is 0.25percen..

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