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British interest rate be if covered interest parity holds

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Reference no: EM13312511

Suppose that 1 yr. US interest rate is 5%. if the 1 year forward rate against the lb. is $1.75 / lb and the spot exchange rete is $1.78/lb, what must the equiavalent British interest rate be if covered interest parity holds?

Reference no: EM13312511

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