Question
If the current exchange rate is $1.95/, the one-year forward exchange rate is $2.05/, and the interest rate on British government bills is 7% per
If the current exchange rate is $1.95/, the one-year forward exchange rate is $2.05/, and the interest rate on British government bills is 7% per year, what risk-free dollar-denominated return can be locked in by investing in the British bills?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Risk-free dollar-denominated return = %
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
