Money supply to drive down interest rates


Assignment:

Q1. The spot rate on the euro is $1.39, and the 180-day forward rate is $1.41. What are possible reasons for the difference between the two rates?

Q2. German government bonds, or Bunds, currently are paying higher interest rates than comparable U.S. Treasury bonds. Suppose the Bundesbank eases the money supply to drive down interest rates. How is an American investor in Bunds likely to fare?

Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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Operation Management: Money supply to drive down interest rates
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