The spot exchange rate in new york is 150 per british pound, Ask an Expert

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The spot exchange rate in New York is $1.50 per British pound. The 1 yr forward exchange rate is $1.550 dollars per pound. The one year interest rate in Great Britain is 2.5% while the one year interst rate in the U.S. 4.5%. If the interst rate in Great Britain remains 2.5%, what should the interest rate be in the U.S. according to the interest rate parity theory?

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Financial Management, Finance

Category:- Financial Management
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