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Interest rate in USA is 4%, Spot exchange rate between GBP and USD is GBP 0.7462/USD and 1 year forward exchange rate is GBP 0.7321/USD.

Interest rate in USA is 4%, Spot exchange rate between GBP and USD is GBP 0.7462/USD and 1 year forward exchange rate is GBP 0.7321/USD. Determine the interest rate in UK by applying the theory of Interest rate parity. a. 1.06% b. 6% C. 2% d. 1.02%

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