Suppose that the one year us interest rate is 5 if the one


Suppose that the one year U.S. interest rate is 5%. If the one year forward rate against the pound is $1.75 per pound and the spot exchange rate is $1.78 per pound, what must the equivalent British interest rate be if covered interest parity holds?

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Econometrics: Suppose that the one year us interest rate is 5 if the one
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