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

question 59

Multiple Choice

The one-year forward exchange rate for the British pound is 1.70 CAD/GBP.If the one-year Canadian interest rate is 5% and the one-year British interest rate is 6%,compute the implied spot exchange rate in CAD/GBP.

• A)1.69
• B)1.72
• C)1.75
• D)1.78
• E)1.81

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