8

The spot exchange rate for the British pound is 1.75 U. S. dollars. 15-month U. S. and British risk-free interest rates are 3% and 4% (both expressed with continuous compounding), The 15-month forward rate is closest to: a. 1.7720 U. S. dollars per British pound O b. 0.5786 British pounds per U. S. dollar OC. 0.6717 British pounds per U. S. dollar O d. 1.4888 U. S. dollars per British pound