Due to the integrated nature of their capital markets, investors in both the U.S. and U.K. require the same real interest rate, 2.5%, on their lending. There is a consensus in capital markets that the annual inflation rate is likely to be 3.5% in the U.S. and 1.5% in the U.K. for the next three years. The spot exchange rate is currently $1.50/. 1 II. Ill. Compute the nominal interest rate per annum in both the U.S. and U.K., assuming that the Fisher effect holds. (5 Marks) Compute the forward dollar-pound exchange rate for one-year maturity? (5 Marks) If, for instance, the annual interest rate is 5 percent in the United States and 8 percent in the U.K. What the uncovered IRP suggests that the expected pound - dollar rate be