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20. Suppose that you know that the 12 month interest rate in the UK is 25 percent per annum, the interest rate in NZ is

20. Suppose that you know that the 12 month interest rate in the UK is 25 percent per annum, the interest rate in NZ is 5 percent per annum, and the spot exchange rate is NZ$1=60.5. From this information, what would you expect the 12 month forward exchange rate to be? 1. NZ$1=60.4 2. NZ$1=60.5 NZ$1=60.6 4 NZ$1=61.0

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