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

question 58

Multiple Choice

The one-year forward exchange rate for the British Pound is $1.90/Pound. If the one-year U.S. interest rate is 4% and the one-year British interest rate is 6%, compute the implied spot exchange rate in $/Pound.

• A) $1.89/pound
• B) $1.90/pound
• C) $1.92/pound
• D) $1.94/pound

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Definitions:

Blood Pressure

Blood pressure measures the force exerted by circulating blood on the walls of blood vessels, crucial for assessing cardiovascular health.

Linearly Related

A connection between two variables in which a variation in one is linked to a corresponding change in the other.

Regression Model

A statistical model that estimates the relationship between a dependent variable and one or more independent variables.

Individual Coefficient

A specific value that quantifies some type of relationship in mathematical or statistical models.