Suppose that: If the 3-month interest rate on Dollars is 3.5% (effective annual rate), what do you think is the 3-month sterling (U.K.) interest rate?
A)1.07%
B)2.07%
C)3.07%
D)4.07% We can utilize the interest rate parity theorem:

Question

Suppose that:  If the 3-month interest rate on Dollars is 3.5% (effective annual rate), what do you think is the 3-month sterling (U.K.) interest rate?
A)1.07% 
B)2.07% 
C)3.07% 
D)4.07% We can utilize the interest rate parity theorem:

Quizplus · Accepted Answer

The Answer of Suppose that:  If the 3-month interest rate on Dollars is 3.5% (effective annual rate), what do you think is the 3-month sterling (U.K.) interest rate?
A)1.07% 
B)2.07% 
C)3.07% 
D)4.07% We can utilize the interest rate parity theorem:

Suppose That: If the 3-Month Interest Rate on Dollars