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

Question 58

Multiple Choice

The one-year forward exchange rate for the British Pound is $1.90/Pound. If the one-year U.S. interest rate is 4% and the one-year British interest rate is 6%, compute the implied spot exchange rate in $/Pound.


A) $1.89/pound
B) $1.90/pound
C) $1.92/pound
D) $1.94/pound

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