Question
Suppose that the six-month interest rate in the United States is 3%, while the six-month interest rate in Britain is 7%. Further, assume the spot
Suppose that the six-month interest rate in the United States is 3%, while the six-month interest rate in Britain is 7%. Further, assume the spot rate of the pound is 1.6.
Given the spot rate of 1.6 of the pound, as well as the premium of -3.7383% that you calculated previously, the six month forward rate of pound should be about _____ under IRP.
Options
1.07813
1.54019
1.84823
1.23215
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The Ascendancy Of Finance
Authors: Joseph Vogl, Simon Garnett
1st Edition
1509509305, 978-1509509300
