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Ethel will be getting USD 11,909 one year from today, but she is British and would rather get paid in pounds. Ethel and borrow and
Ethel will be getting USD 11,909 one year from today, but she is British and would rather get paid in pounds. Ethel and borrow and lend US dollars at 1.7% and British pounds at 2.6%. If the exchange rate today is USD 1.53 per GBP, how many British pounds will she get for her USD in one year if she eliminates her forex risk using a forward market hedge? Please give your answer to the nearest pound.
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