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The interest rate in the US is 4% p. a. and the interest rate in UK is 6% p.a. |If the spot exchange rate is

The interest rate in the US is 4% p. a. and the interest rate in UK is 6% p.a.

|If the spot exchange rate is $1.30 per pound what is the one year ahead forward that will imply zero arbitrage profit opportunities?

a. 1.2755

b. 1.3106

c. 1.2798

d. 1.3207

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