You are a Canadian Importer of goods from UK and have agreed to purchase electronic equipment for a cost of GBP (Pounds) 4,500,000.00 (Four million five hundred). Contract calls for payment in UK pounds at 270 days after immediate shipment having taken place. Using the following information assuming shipment is made, calculate the forward exchange rate (using the correct method given in class see below) that your assigned bank in Canada will agree on to provide a forward exchange rate hedge covering the contract cost to avoid fluctuations in the currency market prior to settlement.

Amount GBP 4,500,000

Term 190 days based on a 365day year

Spot rate Bid =1.6950 Offer 1.7027

Interest Rate UK 6.00% per annum

Interest rate Cda 4.5% per annum