Use the Information for the Question(s)below

question 48

Multiple Choice

Use the information for the question(s) below.
The current spot exchange rate,S,is $1.8862/£.Suppose that the yield curve in both countries is flat.The risk-free rate on dollars,r$,is 5.35% and the risk-free interest rate on pounds,r£,is 4.80%.
-Using the covered interest parity condition,the calculated one-year forward rate F1 is closest to:

• A)$1.8568/£.
• B)$1.8764/£.
• C)$1.9161/£.
• D)$1.8961/£.

Understand the importance and effects of input prices on production costs and output.

Comprehend the substitution effect and output effect on the demand for labor and capital.

Learn about the projections for the fastest-growing and declining occupations in the U.S.

Understand the principles of profit maximization in resource allocation.

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Definitions:

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