Question: Given the information: Interest rate in US (Rh): 4% Interest rate in UK (RF): 2% Line of credit in US USD 15,000,000 Line of credit

Given the information: Interest rate in US (Rh): 4% Interest rate

Given the information: Interest rate in US (Rh): 4% Interest rate in UK (RF): 2% Line of credit in US USD 15,000,000 Line of credit in UK GBP 10,000,000 The current spot rate for GBP (SRo: $1.50 Suppose your forecast tells you that the spot rate of GBP one year later (SR2) will be $1.52. Then, based on your estimated uncovered rates (Ruh & Ruf), you should borrow in and invest in GBP: USD USD: GBP

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