Expected percent change in the value of the british pound

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Reference no: EM132047256

Assume that U.S. and British investors require a real return of 2.5 %. The nominal U.S. interest rate is 10.6 %, and the nominal British interest rate is 8.1 %. The current spot exchange rate is 1.24 USD/GBP.

If the IFE holds, what is the expected percent change in the value of the British pound relative to the dollar, over the course of the year? Enter answer in percents.

Reference no: EM132047256

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