Suppose that you know the UK interest rate and the current Euro/pound exchange rate. In addition you know the price of a 1-year at the money European...

Is the above statement TRUE, FALSE or UNCERTAIN? Please provide a brief explanation with the answer.

Suppose that you know the UK interest rate and the current Euro/pound exchange rate.In addition you know the price of a 1-year at the money European put and call optionson the Euro with the same expiration date. Given the information described above thereis only one Euro interest rate that will be consistent with no arbitrage. (10 marks)