The interest rate in UK is 3% per annum and the interest rate in the US is 2% per annum. The spot exchange rate is $1.2

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answerhappygod
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The interest rate in UK is 3% per annum and the interest rate in the US is 2% per annum. The spot exchange rate is $1.2

Post by answerhappygod »

The interest rate in UK is 3% per annum and the interest rate in
the US is 2% per annum. The spot exchange rate is $1.20 per
pound. What is the future spot rate one year later that will
make a speculator’s profit zero? Assume the speculator
borrows $100 in the US and invests in UK.
$1.8725 per pound
$1.8884 per pound
$1.8902 per pound
$1.8927 per pound
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