Suppose the one-year forward $/euro exchange rate is $1.2 per euro and the spot exchange rate is $1.1 per euro. What is the forward premium on euros (the forward discount on dollars) ? The forward premium on euros is nothing percent. (Give your answer as a percentage with one decimal and do not forget a negative sign, if appropriate. ) Given the above information, what is the difference between the interest rate on one-year dollar deposits and that on one-year euro deposits (assuming no political risk) ? The difference between the dollar interest rate and the euro interest rate Upper R Subscript $ Baseline minus Upper R Subscript euro Baseline equals nothing percent. (Give your answer as a percentage with one decimal and do not forget a negative sign, if appropriate. )
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