Question about International Aspects of Financial Management
The 1-year forward rate for the British pound is â?¤0.6781=$1. The spot rate is 0.6789=$1. The interest rate on a risk-free asset in the U.K. is 4.6 percent. If interest parity exists, what is the 1 year risk-free rate in the U.S.?
a) 4.68 percent
b) 4.72 percent
c) 4.77 percent
d) 4.83 percent
e) 4.87 percent