Question: 1. If the current exchange rate between the US and the UK is such that the current price of a pound is $1.20. What is

1. If the current exchange rate between the US and the UK is such that the current price of a pound is $1.20. What is the expected future exchange rate in one year if the US risk free rate is 2% and the UK risk free rate is 2.5% (use 5 decimal places)?

2. Which is a benefit of including international stocks in an investment portfolio?

a. Greater ability to diversify

b. Political risk exposure

c. Exchange rate risk

d. Financial risk

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