Question
Interest rates in Switzerland are currently 1.5% p.a. and in the United Kingdom interest rates are currently offered at 4.5% p.a. Current exchange rates are
Interest rates in Switzerland are currently 1.5% p.a. and in the United Kingdom interest rates are currently offered at 4.5% p.a. Current exchange rates are USD/CHF 0.9045 and GBP/USD 1.2652
The USD is currently selling at a forward discount of 3.6% p.a. against the Swiss Franc (CHF).
The GBP is currently selling at a forward discount of 0.13% p.a. against the USD.
Generate a five-year forecast for the value of the British Pound in terms of Swiss Francs using Unbiased Forward Expectations.
Show all workings.
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Foreign Exchange Options An International Guide To Currency Options Trading And Practice
Authors: Alan Hicks
2nd Edition
185573253X,1845699017
