Suppose 90-day investments in Europe have an annualized return of 8 percent and a quarterly 90-day return of 2 percent. In the US, 90-day investments of similar risk have an annualized return of 11 percent and a quarterly return of 2.75 percent. In todays 90 day forward market, 1 euro equals $1.38. If interest rate parity holds, what is the spot exchange rate ($/E)
If interest rate parity holds, the spot exchange rate is what? ROUND 4 DECIMAL PLACES