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Suppose that the six-month interest rate in the United States is 3%, while the six-month interest rate in Britain is 4%, Further, assume the spot

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Suppose that the six-month interest rate in the United States is 3%, while the six-month interest rate in Britain is 4%, Further, assume the spot rate of the pound is 1.25 . According to interest rate parity (IRP), the forward rate premlum of the pound with respect to the U.S. dollar should be (not annualized)

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