The Spot Exchange Rate for the British Pound Is 0

question 47

Multiple Choice

The spot exchange rate for the British pound is 0.6 pounds/dollar. The one-year interest rate in the United States is 5% and the one-year interest rate in Britain is 6%. Based on these rates, what one-year forward exchange rate is consistent with the absence of arbitrage?

• A) 0.606 pounds/dollar
• B) 0.612 pounds/dollar
• C) 0.617 pounds/dollar
• D) 0.624 pounds/dollar

---

Definitions:

Express Easement

A right granted by a landowner for the use of a portion of their property for a specific purpose, explicitly stated in writing.

Common Elements

are the parts of a condominium or co-operative property that are shared among all owners, such as lobbies, gyms, and pools.

Right of Lien

The legal right to retain possession of property belonging to another person until a debt owed by that person is discharged.

Registry System

A system for recording and tracking legal rights and interests in property, usually maintained by a government or official body, to establish ownership and transactions.