Your managing director has received forecasts of US$ exchange rates in two years time from the leading banks. $/ forecasts 10 NOVEMBER 2025 Pallbank 1.25 Superbank 1.55 Emubank 1.68 The current spot mid-rate (10 NOVEMBER 2023) is $1.5240/. A non-executive director of your company has suggested that in order to forecast future exchange rates, the interest rate differential between countries should be used. She states that as short-term interest rates are currently 6% in the UK, and 8.5% in the USA, the exchange rate in two years time will be $1.597/. Required You have been asked by your managing director to prepare a brief report discussing the likely validity of the non-executive directors estimate. Show workings