Problem
Suppose the one-year forward $/€ exchange rate is $1.26 per euro and the spot exchange rate is $1.2 per euro. What is the forward premium on euro (the forward discount on dollars)? 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 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.