The Figure Given Below Depicts the Foreign Exchange Market for British

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Assume that a one-year Malaysian bond yields 10 percent interest and that the dollar return on maturity is 5 percent. If the exchange rate at maturity is $1 = MYR 4.00 (Malaysian ringgit) , what was the exchange rate at the time the bond was purchased?

A) $1 = MYR 4.2
B) $1 = MYR 3.8
C) $1 = MYR 3.6
D) MYR 1 = $0.26
E) MYR 1 = $0.4