If the current exchange rate is 125pound the one-year, Financial Management

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If the current exchange rate is 125pound the one-year

If the current exchange rate is $1.25/£, the one-year forward exchange rate is $1.40/£, and the interest rate on British government bills is 10.50% per year, what risk-free dollar denominated return can be locked in by investing in the British bills?

Risk Free Return?

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Financial Management: If the current exchange rate is 125pound the one-year

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