Suppose you observe a spot exchange rate of $2.00/£. If interest rates are 5 percent APR in the U.S. and 2 percent APR i
Posted: Thu May 19, 2022 6:24 am
Suppose you observe a spot exchange rate of $2.00/£. If interest
rates are 5 percent APR in the U.S. and 2 percent APR in the U.K.,
what is the no-arbitrage 7-year forward rate? Hint: in
(USD/GBP)
rates are 5 percent APR in the U.S. and 2 percent APR in the U.K.,
what is the no-arbitrage 7-year forward rate? Hint: in
(USD/GBP)