Multiple Choice
Consider the simple case of covered interest parity. If the spot market exchange rate is £1 = $2.50,the one-year UK interest rate is 6% and the one-year US interest rate is 4%,then the one-year forward rate must price the pound sterling at
A) $2.75
B) $2.55
C) $2.45
D) $2.25
E) $2.15
Correct Answer:
Verified
Correct Answer:
Verified
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