Assume the Current U

question 44

Multiple Choice

Assume the current U.S. dollar-British spot rate is £0.6993/$. If the current nominal one-year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?

• A) £1.42/$
• B) £1.43/$
• C) £0.6993/$
• D) £0.7060/$

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Definitions:

Identification

The process of recognizing or establishing the identity of something or someone.

Affiliation Motivation

The drive to build and maintain social relationships and feel connected and accepted by others.

Hatred

An intense emotion expressing animosity, anger, or hostility towards a person, group, or object.

Jealousy

An emotion stemming from fear or envy of losing affection or status to a rival.