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The spot exchange rate for British pounds is 1.3025 (USD/GBP where the first-named currency-USD- is the unit currency) The 180-day risk-free interest rates in the

The spot exchange rate for British pounds is 1.3025 (USD/GBP where the first-named currency-USD- is the unit currency) The 180-day risk-free interest rates in the US and Britain are 3% and 2.75% respectively. What is the forward exchange rate in GBP/USD?

Choose one answer.

A.1.3025

B.1.2993

C.1.3057

D.None of the above

Why the correct answer is C?

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