The one-year forward rate for the British pound is £0.6781 = $1.The spot rate is £0.6789 = $1.The interest rate on a risk-free asset in the UK is 4.6 percent.If interest rate parity exists,what is the one-year risk-free rate in the U.S.?
A) 4.68 percent
B) 4.72 percent
C) 4.77 percent
D) 4.83 percent
E) 4.87 percent
Correct Answer:
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