What is the approximate forward exchange rate

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Assume the current U.S. dollar-British spot rate is £0.6993/$. If the current nominal one year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?

a. £1.4300/$

b. £0.6927/$

c. £0.6993/$

d. £0.7060/$

Assume the current U.S. dollar-yen spot rate is 125¥/$. Further, the current nominal one year rate of return in Japan is 1.00% and 2.95% in the United States. What is the approximate forward exchange rate for 180 days?

a. 123.80¥/$

b. 124.00¥/$

c. 124.39¥/$

d. 124.67¥/$

Reference no: EM132234862

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