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The current spot exchange rate, S, is 1.8862 CAD/GBP. Suppose that the yield curve in both countries is flat. The risk-free rate on dollars, rCAD, is 5.35% and the risk-free interest rate on pounds, rGBP, is 4.80%.
-Using the covered interest parity condition,the calculated one-year forward rate F₁ is closest to:
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