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Currently, the spot exchange rate is $1.58/L and the three-month forward exchange rate is $1.60/L. The interest rate is 8 percent per annum in the

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Currently, the spot exchange rate is $1.58/L and the three-month forward exchange rate is $1.60/L. The interest rate is 8 percent per annum in the U.S. and 5.8 percent per annum in the U.K. Assume that you can borrow as much as $1.580,000 or 51,000,000. a. Determine whether interest rate parity is currently holding. Yes No

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