Suppose the Exchange Rates Are as Follows: Assume Interest

question 45

Multiple Choice

Suppose the exchange rates are as follows: Assume interest rate parity holds and the current six-month risk-free rate in the United States is 3.1 percent.What must the six-month risk-free rate be in Great Britain?

• A)2.36 percent
• B)2.87 percent
• C)2.94 percent
• D)3.10 percent
• E)3.52 percent

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