4.27It is July 1, 1990.Suppose the spot rates for the pound, mark, and Swiss franc are $1.30, $.35, and $.40, respectively. The associated 90day interest rates (annualized) are 16%, 8%, and 4%, while the U.S. 90day interest rate (annualized) is 12%. What is the 90day forward rate on an ACU (ACU 1 = 1 + DM1 + SFr1) if interest parity holds?

a)$2.0512

b)$2.1134

c)$2.0397

d)$2.0489

How do I solve this? What are the steps?