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Assume that U.S. and British investors require a real return of 2 %. The nominal U.S. interest rate is 13.2 %, and the nominal British interest rate is 8.7 %. The current spot exchange rate is 1.31 USD/GBP.

If the IFE holds, what is the expected percent change in the value of the British pound relative to the dollar, over the course of the year?

Enter answer in percents.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92856613

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