Multiple Choice
Assume that the current exchange rate between U.K.pound and the U.S.dollar is 2 (E = 2.0) .If interest parity holds,and the U.S.interest rate is 6% while the U.K.interest rate is 8%,the expected exchange rate in one year is
A) 1) 98.
B) 1) 99.
C) 2) 01.
D) 2) 02.
E) 2.04.
Correct Answer:
Verified
Correct Answer:
Verified
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