Question
15. The spot Dollar-GBP sterling exchange rate is $1.80 per pound. The U.S. and U.K 1-year simple interest rates are 4% and 2% respectively. The
15. The spot Dollar-GBP sterling exchange rate is $1.80 per pound. The U.S. and U.K 1-year simple interest rates are 4% and 2% respectively. The futures price for delivery in one year is $1.86 per pound. What is the interest rate for the synthetic sterling money market constructed using the foreign currency spot and futures markets?
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Governing Global Finance
Authors: Michele Fratianni, Paolo Savona
1st Edition
1138742147, 978-1138742147
