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yield on a 1-year bill in the U.K. is 8% present exchange rate is 1 pound = U.S 1.2 1-year forward rate is 1 pound
yield on a 1-year bill in the U.K. is | 8% | ||
present exchange rate is 1 pound = U.S | 1.2 | ||
1-year forward rate is 1 pound | 1.23 | ||
the return a U.S. investor can expect to earn by investing in U.K. bills is |
8.78% | ||
9.42% | ||
10.70% | ||
11.42% |
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