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The return in Europe is 8 percent and in the United States is 12 percent. The...

The return in Europe is 8 percent and in the United States is 12 percent. The euro is currently $1.20 USD. What should be the value of the euro in 180 days?

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Answer #1
Future rate=Spot rate*((1+Quoted currency Risk free rate)/(1+Base currency Risk free rate))^time
Future rate=1.2*((1+0.12)/(1+0.08))^0.5
Future rate(USD/EUR) = 1.22
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