Assume that 90-day investments in britain have a 72, Ask an Expert

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Assume that 90-day investments in Britain have a 7.2% annualized return and a 1.8% quarterly (90-day) return. In the U.S., 90-day investments of similar risk have a 4.0% annualized return and a 1.0% quarterly (90-day) return. In the 90-day forward market, 1 British pound equals $1.65. If interest rate parity holds, what is the spot exchange rate ($/£)?

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Financial Management, Finance

Category:- Financial Management
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