Assume the Current U

question 49

Multiple Choice

Assume the current U.S. dollar-British spot rate is 0.6134£/$. If the current nominal one-year interest rate in the U.S. is 2.5% and the comparable rate in Britain is 3.5%, what is the approximate forward exchange rate for 360 days?

• A) 1.42£/$
• B) 0.6075£/$
• C) 0.6134£/$
• D) 0.6194£/$

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