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Suppose the annual interest rate is 7% in the US and 8.5% in the UK, and the spot exchange rate is USD 1.9700/GBP and the
Suppose the annual interest rate is 7% in the US and 8.5% in the UK, and the spot exchange rate is USD 1.9700/GBP and the one-year forward rate is USD 1.9800/GBP.
(2.5 points) Calculate the one-year forward USD/GBP rate that would eliminate an arbitrage opportunity, using the information above.
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Affordable Housing Finance
Authors: K. Hawtrey
2009th Edition
0230555187, 978-0230555181
