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Currently, the spot exchange rate is $1.52/ and the three-month forward exchange rate is $1.54/. The three-month interest rate is 5.84% per annum in the

Currently, the spot exchange rate is $1.52/ and the three-month forward exchange rate is $1.54/. The three-month interest rate is 5.84% per annum in the U.S. and 5.84% per annum in the U.K. Assume that you can borrow as much as $1,500,000 or 1,000,000.

Is the interest rate parity (IRP) currently holding?

Yes

NO

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