8. The spot exchange rate is 1=$1.20. The current 1 year UK interest rate is 1.0% and the US 1 year rate is 2.5%. Overnight there is a sudden fall in the value of sterling down to 1=$1.198. There is no change in interest rates. Overnight the 1 year forward rate:

A

Rises from 1.230 to 1.330

B

I do not wish to answer this question.

C

Falls from 1.205 to 1.179

D

Rises from 1.227 to 1.337

E

Falls from 1.218 to 1.216

F

Falls from 1.182 to 1.180