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The One-Year Forward Exchange Rate for the British Pound Is

Question 25

Multiple Choice

The one-year forward exchange rate for the British pound is 1.80 CAD/GBP.If the one-year Canadian interest rate is 4.5% and the one-year British interest rate is 6%,compute the implied spot exchange rate in CAD/GBP.


A) 1.75
B) 1.79
C) 1.83
D) 1.88
E) 1.92

Correct Answer:

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