Solution-Pound current spot rate, Assume the annual British

Pound current spot rate

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Assume the annual British interest rate is above the annual U.S. interest rate (iuk > ius). Also assume the pound's forward rate of $1.75 equals the pound's current spot rate. Given this information, interest rate parity ________ exist, and the U.S. firm _________ lock in a higher return by investing in pounds for one year.

Reference no: EM131092499

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Pound current spot rate

Reference no: EM131092499

Reference no: EM131092499

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