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Assume that interest rate parity holds and that 45-day risk-free securities yield a nominal annual rate of 5% in the US and a nominal annual rate of 4% in the UK. In the spot market, 1 pound = $1.32. What is the 45-day forward rate? (Assume a 360 day year). O 1.32164 dollars per pound 1.32587 dollars per pound O 1.31354 dollars per pound 1.32568 dollars per pound O 1.31782 dollars per pound A US corporation has a foreign subsidiary. The subsidiary (based in the United Kingdom) of ACME company will earn 3.5 pounds of dividends per share. The dollar-pound exchange rate at the end of the year is expected to be $1.43 per pound, and the pound is expected to appreciate 2% against the dollar each year for an indefinite period. The dividend (in pounds) is expected to grow at 3% a year indefinitely. First, find the growth rate of dividends after adjusting for currency effects. What is the value in millions of dollars of its equity ownership of the subsidiary (use the dividend discount model and total shares)? Assume a cost of equity capital of 10% for the subsidiary and a total of 15 million shares outstanding. 1533 O 1453 O 1612 1576 O 1497