If the current exchange rate is 205pound the 1-year forward, Ask an Expert

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If the current exchange rate is $2.05/£, the 1-year forward exchange rate is $1.9/£, and the interest rate on British government bills is 5% per year.

What risk-free dollar-denominated return can be locked in by investing in the British bills? (Round your answer to 2 decimal places. Do not round intermediate calculations. Omit the "%" sign in your response.)

Risk-free dollar-denominated return %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92352484

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