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S0 = $1.2158/ S0 = 0.7378/$ S0 = $1.3554/ E (S1 (3-months)) = $1.2640/ F3-months = $1.1880/ Where: = euro; = British pound; E (
S0 = $1.2158/ S0 = 0.7378/$ S0 = $1.3554/ E (S1 (3-months)) = $1.2640/ F3-months = $1.1880/ Where: = euro; = British pound; E ( ) = Expected.
- If one year ago the spot price of British pounds in terms of the $ was $1.2960/. Do you think the British pound has appreciated or depreciated against the dollar over the last year (explain answer without any calculations)? What was the percentage rate of change in the value of the pound over the last year? Is your numerical answer consistent with your explanation?
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