The following exchange rates of UK sterling () against the Australian dollar (A$) have been quoted:

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answerhappygod
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The following exchange rates of UK sterling () against the Australian dollar (A$) have been quoted:

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Spot 1 = A$1.7574 -
Six months forward, 1 = A$1.7245
The interest rate in Australia is 5% per year for a six-month deposit or borrowing.
What is the annual interest rate for a six-month deposit or borrowing in the UK?
A. 4·45%
B. 7·00%
C. 8·90%
D. 9·95%
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