Risk-free dollar-denominated return

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Reference no: EM131545202

If the current exchange rate is $1.95/£, the 1-year forward exchange rate is $2.05/£, and the interest rate on British government bills is 7% 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 _______% ?

Reference no: EM131545202

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