Problem
Suppose that U.S. interest rates are 4 percent more than rates in the EU.
a. Would you expect the dollar to appreciate or depreciate against the euro, and by how much?
b. If, contrary to your expectations, the forward and spot rates are the same, in which direction would you expect financial capital to flow? Why?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.