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Suppose That: If the 3-Month Interest Rate on Dollars

question 124

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Suppose that: Suppose that:   If the 3-month interest rate on Dollars is 3.5% (effective annual rate) , what do you think is the 3-month sterling (U.K.)  interest rate? A) 1.07% B) 2.07% C) 3.07% D) 4.07% We can utilize the interest rate parity theorem: If the 3-month interest rate on Dollars is 3.5% (effective annual rate) , what do you think is the 3-month sterling (U.K.) interest rate?


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