What rate of interest is expected on british treasury bills

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1. Describe how the concepts of relative purchasing power parity, interest rate parity, and the international Fisher effect are related.

2. If the 1-year U.S. Treasury bill rate is 7.0 percent, the spot rate between U.S. dollars and British pounds is £1 = $1.69, and the 90-day forward rate is £1 = $1.68, what rate of interest is expected on British Treasury bills, assuming that interest rate parity between the dollar and pound exists?

Reference no: EM131334828

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