You observe that the U.K. annual interest rate is 2.5 percent, the U.S. annual interest rate is

Question:

You observe that the U.K. annual interest rate is 2.5 percent, the U.S. annual interest rate is 3.8 percent, the 3-month forward rate is $1.8180/£, and the spot rate is $1.8034/£. Assuming that transaction costs are 0.2 percent, are the financial markets in equilibrium?