Suppose the Exchange Rate Between the U

question 69

Multiple Choice

Suppose the exchange rate between the U.S.dollar and the British pound is US$1.50 = BP1.00.If the interest rate is 6% per year,what is the adjusted price of the British pound when valuing a foreign currency option with an expiration of one year?

• A)$1.9050
• B)$1.4151
• C)$0.7067
• D)$1.5900

---

Definitions:

Attraction Test

A method or experiment designed to measure the appeal or attractiveness of an object, individual, or concept.

Attachment Behaviour

The tendency of an infant to maintain close physical proximity to the mother or primary caregiver.

Bowlby

John Bowlby was a British psychologist best known for his work in developing Attachment Theory, which emphasized the importance of early emotional bonds between children and their caregivers.

Caregiver

A person who provides direct care, support, and assistance to someone in need, often a child, elderly, or disabled person.