Assume the spot rate for the British pound currently is £.6369 per $1. Also assume the one-year forward rate is £.6421 per $1. A risk-free asset in the U. S. is currently earning 3.2 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free British security?
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Home » Business » Assume the spot rate for the British pound currently is £.6369 per $1. Also assume the one-year forward rate is £.6421 per $1. A risk-free asset in the U. S. is currently earning 3.2 percent.