Assume the Spot Rate for the British Pound Is Currently

question 76

Multiple Choice

Assume the spot rate for the British pound is currently £.1.5604 while the 1-year forward rate is £1.5587.A risk-free asset in the United States is currently earning 2.6 percent.If interest rate parity holds,approximately what rate can you earn on a 1-year risk-free British security?

• A)2.28%
• B)2.23%
• C)2.46%
• D)2.49%
• E)2.37%

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Definitions:

Primatologists

Scientists who study primates, including monkeys, apes, and humans, often focusing on behavior, biology, and evolution.

Tool

An object used to facilitate some task or activity. Although tool making involves intentional modification of the material of which it is made, tool use may involve objects either modified for some particular purpose or completely unmodified.

Primatology Studies

The scientific study of primates, encompassing their behavior, biology, and evolution.

Social Structure

The structured formation of social bonds and societal structures that collectively constitute society.