You are given the following hypothetical quotes. Spot exchange rates: € :$ 1.1865-1.1870 $:¥…

You are given the following hypothetical quotes. Spot exchange rates: € :$ 1.1865-1.1870 $:¥ 108.10-108.20 Three-month interest rates (percent per year): In $ 5-5*4 In€ 3V4SV2 In¥ V-% What should the quotes be for the following? a. €:¥ spot exchange rate. b. €:$ three-month forward ask exchange rate. Hint. Buying euros forward is equiva¬lent to borrowing dollars to buy euros spot and investing the euros. c. $:€ three-month forward bid exchange rate. d. $:¥ three-month forward bid and ask exchange rate.

 

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