Suppose the spot exchange rate is 2 U.S. dollars per British pound. The forward exchange rate is 1.9 dollars per pound. Which of the following is true?
A) The U.S. inflation rate is lower.
B) The pound is selling at a premium.
C) The pound is selling at a discount.
D) U.S. interest rates are lower.
E) More than one of these is truE.
Correct Answer:
Verified
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