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Find annual interest rate in the uk

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Reference no: EM133002783

Assume the following: you have $10,000 to invest; the current spot rate of British pounds is $1.800; the forward rate of the pound is $1.780; the annual interest rate in the US is 1%; the annual interest rate in the UK is 1.5%.

Where would you invest your $10,000 to maximize your yield with no foreign exchange risk and approximately how much more you make compare to the other option?

Reference no: EM133002783

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