All quotes correctly algebraically Show all calculations The interest rate in the United States is 0.5% and
Fantastic news! We've Found the answer you've been seeking!
Question:
All quotes correctly algebraically
Show all calculations
The interest rate in the United States is 0.5% and 1.5% in the United Kingdom. The spot price is 0.90 GBP / USD. The one-year forward exchange rate is 1.0 USD / GBP.
a) Make an Arbitration.
b) What does the forward exchange rate have to be in order for there to be no possibility of a arbitrage?
Expert Answer:
Posted Date:
