Suppose You Observe a Spot Exchange Rate of $2

question 59

Multiple Choice

Suppose you observe a spot exchange rate of $2.00/£. If interest rates are 5% APR in the U.S. and 2% APR in the U.K., what is the no-arbitrage 1-year forward rate?

• A)£2.0588/$
• B)$2.0588/£
• C)£1.9429/$
• D)$1.9429/£

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Definitions:

Physicians

Medical professionals licensed to diagnose and treat illnesses, injuries, and other health conditions.

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, amelioration, or cure of disease, illness, injury, and other physical and mental impairments in people.

Government Funding

Government funding refers to financial support provided by a government for projects, services, or to assist sectors of the economy.

Pediatric Care

Comprehensive medical care and services provided to infants, children, and adolescents, focusing on their growth, development, and health issues.