The current USD/GBP exchange rate is 1.8 dollars per pound. The six-month forward exchange rate is 1.82. The six-month GBP interest rate is 3% p.a. quarterly compounded. Estimate the six-month USD interest rate (p.a. quarterly compounded, stated in percent).

The current USD/GBP exchange rate is 1.8 dollars per pound. The six-month forward exchange rate is 1.82. The six-month GBP interest rate is 3% p.a. quarterly compounded. Estimate the six-month USD interest rate (p.a. quarterly compounded, stated in percent).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 1P

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