The Spot Exchange Rate for the British Pound Is 0

question 55

Multiple Choice

The spot exchange rate for the British pound is 0.65 GBP/CAD.The one-year interest rate in Canada is 5% and the one-year interest rate in Britain is 7%.Based on these rates,what one-year forward exchange rate is consistent with the absence of arbitrage?

• A)0.646
• B)0.652
• C)0.662
• D)0.674
• E)0.631

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Definitions:

ATP Channel Protein

A type of membrane protein that allows ATP molecules to move across cell membranes, often involved in cellular energy management.

Mitochondrial Matrix

The innermost compartment of mitochondria, enclosed by the inner membrane, containing enzymes for the citric acid cycle and DNA.

NADH

Nicotinamide adenine dinucleotide (NADH) is the reduced form of NAD+, an important coenzyme in cellular respiration, acting as an electron carrier.

Hydrogen Ions

Positively charged ions (H+) that are formed when hydrogen atoms lose or gain an electron and are central to acid-base chemistry.