Using the Covered Interest Parity Condition,the Calculated Three-Year Forward Rate

question 15

Multiple Choice

Using the covered interest parity condition,the calculated three-year forward rate F₃ is closest to:

• A)$1.8568/£
• B)$1.9161/£
• C)$1.8961/£
• D)$1.8764/£

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Definitions:

Credit Balance

The amount of money that a creditor owes to a debtor, reflecting payments exceeding charges on an account.

Collection Agency

A business that specializes in recovering unpaid debts on behalf of the original creditor.

Ledger Card

A ledger card is a physical or digital record used to track financial transactions and balances over time in accounting practices.

Preprinted

Materials or documents that have been printed in advance with standardized or generic information before any specific, customizable information is added.