The One-Year Forward Exchange Rate for the British Pound Is

question 81

Multiple Choice

The one-year forward exchange rate for the British Pound is $1.70/Pound. If the one-year U.S. interest rate is 5% and the one-year British interest rate is 6%, compute the implied spot exchange rate in $/Pound.

• A) $1.69/pound
• B) $1.72/pound
• C) $1.75/pound
• D) $1.78/pound