Suppose the spot exchange rate is $1 = £.7304 and the 1-month forward rate is $1 = £.7303.Given this,you know the:
A) U.S.inflation rate is higher than the U.K.'s.
B) U.S.nominal interest rate is higher than the U.K.'s.
C) pound is selling at a discount.
D) U.S.real risk-free interest rate is higher than the U.K.'s.
E) pound is selling at a premium.
Correct Answer:
Verified
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Q7: Triangle arbitrage:
A)no longer exists due to the
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A)Importers
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