Suppose that the three-months interest rate in New York is 5 percent and the three-months interest rate in London is 4 percent, and that the spot rate is £0.50/$ (e=d/f ) and the three- months forward rate is £0.47/$ (F =d/f). If UK is the domestic country, calculate the covered interest differential. On the basis of this result, which country would you expect to face capital inflows and which one would face capital outflows?