Question
Lets assume that the current USD/GBP exchange rate is 1.4 dollars per pound, the one-year U.K. interest rate is 20% per annum with annual compounding,
Lets assume that the current USD/GBP exchange rate is 1.4 dollars per pound, the one-year U.K. interest rate is 20% per annum with annual compounding, and the one-year U.S. interest rate is 50% per annum with annual compounding. Then, the one-year forward exchange rate should be __________ dollars per pound. (*USD= U.S. dollar, GBP=Great Britain pound=U.K. pound) ?
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
