If interest parity holds and the interest rate in the uk is


If interest parity holds and the interest rate in the U.K. is 6 percent, the interest rate in the US is 4.5 percent, and the one-year forward exchange rate is 1.75 dollars per British pound, what must be the spot exchange rate?

Is the U.S. dollar expected to appreciate or depreciate against the British pound?

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Financial Management: If interest parity holds and the interest rate in the uk is
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