Spot Rate $1.30/GBP Forward Rate (3 month) $1.25/GBP UK Interest Rate (annualized) 12% USA Interest Rate (annualized)

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Question:

Spot Rate

$1.30/GBP

Forward Rate (3 month)

$1.25/GBP

UK Interest Rate (annualized)

12%

USA Interest Rate (annualized)

16%

1.Compute the 3-month forward rate implied by this data.

Posted Date: May 18, 2024 06:00 PM

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Spot Rate $1.30/GBP Forward Rate (3 month) $1.25/GBP UK Interest Rate (annualized) 12% USA Interest Rate (annualized)

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