The spot exchange rate for British pounds is 0.5025 (BP/US$) . The 180-day risk-free rates in the US and Britain are 3% and 2.75%, respectively. What is the forward exchange rate in BP/US$? (Assume that the interest rates are for 180-days.)
A) 0.6170
B) 0.5037
C) 0.5013
D) none of the above
Correct Answer:
Verified
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