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Business, 20.08.2020 18:01 Rainey1664

Assume the spot rate for the British pound currently is $1.5701/£. Also assume the one-year forward rate is $1.5574/£. A risk-free asset in the U. S. is currently earning 3.2 percent interest rate. If interest rate parity holds, what rate can you earn on a one-year risk-free British security? A) 2.37 percent B) 4.57 percent C) 3.67 percent D) 4.04 percent E) 4.92 percent

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Assume the spot rate for the British pound currently is $1.5701/£. Also assume the one-year forward...
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