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Due to the integrated nature of their capital markets, Investors in both the US and U.K. require the same real interest rate, 2.5%, on their
Due to the integrated nature of their capital markets, Investors in both the US and U.K. require the same real interest rate, 2.5%, on their ending.There is a consensus in capital markets that the annual inflation rate is likely to be 3.5% in the US and 1.5 in the UK. for the next three years. The spot exchange rate is currently $1.50/6. What is your expec future spot dollar pound exchange rate in three years from now? Please round your answer to 4 decimal places 16
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