You are a sales manager for Google Nexus and export cellular phones from the United States to other countries. You have

[answerhappygod]

You are a sales manager for Google Nexus and export cellular
phones from the United States to other countries. You have just
signed a deal to ship phones to a British distributor. The deal is
denominated in pounds, and you will receive £700,000 when the
phones arrive in London in 180 days. Assume that you can borrow and
lend at 7% p.a. in U.S. dollars and at 10% p.a. in British pounds.
Both interest rate quotes are for a 360-day year. The spot exchange
rate is $1.4945/£, and the 180-day forward exchange rate is
$1.4802/£. First, you can sell pounds forward for dollars. Second,
you can borrow the present value of the pounds, and convert the
loan principal to dollars in the spot market, and then use the
pound receivable to pay off the interest plus principal on the loan
at maturity. Assume that the dollar interest rate and the exchange
rates are correct. Determine the closest sterling interest rate
that would make your firm indifferent between the two
alternatives.
A) 10.48%
B) 4.50%
C) 9.10%
D) 10.45%
E) None of the above