Assume that Spot USD/GBP (Cable) = 1.3 One year GBP interest, r domestic = 2% One year

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Assume that Spot USD/GBP (Cable) = 1.3 One year GBP interest, r domestic = 2% One year USD interest, r foreign = 3%

i) Calculate the one year USD/GBP FFX Rate

ii) Calculate the forward points, is the forward rate at a premium or discount to the spot rate?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Apr 05, 2023 07:33 AM

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Assume that Spot USD/GBP (Cable) = 1.3 One year GBP interest, r domestic = 2% One year

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i To calculate the one year USDGBP FFX rate we need to use the interest rate ... View the full answer

Income Tax Fundamentals 2013

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