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

question 52

Multiple Choice

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

• A)1.78
• B)1.69
• C)1.72
• D)1.75

---

Definitions:

Corporate Consolidation

The process where companies merge or are acquired, leading to a reduction in the number of companies in an industry and often increasing the market power of the remaining firms.

Work Force

The total number of a country's population who are employed or actively seeking employment.

Union Movement

A social and political movement that advocates for the rights and interests of workers, often through the formation and operation of labor unions.

Industrial Growth

The increase in production and economic scale within the industrial sector, leading to the expansion of industries and manufacturing capabilities.