Question
Current exchange rates, 6 month forward exchange rates and risk free interest rates are as follows: Spot Fwd Spot Fwd Per C$ Per C$ Per
Current exchange rates, 6 month forward exchange rates and risk free interest rates are as follows:
Spot Fwd Spot Fwd
Per C$ Per C$ Per US$ Per US$
Australian Dollars 1.23901 1.22891 1.48038 1.47065
British Pounds 0.535174 0.5456 0.639427 0.6495
Canadian Dollars 1.00 1.00 1.1948 1.2231
Euro 0.655924 0.64993 0.783699 0.7811
Suppose interest rate parity holds.
If the current six-month risk-free rate in the United States is 4.4%, what must the six-month risk-free rate be in Britain? (***Carry all decimal places for interim calculations, round final answers to 4 places.***)
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