What is the effective yield of this security

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QUESTION - Your client has been offered a money market security with a par value £1000 that matures in one year in the UK market. The current price on the market is $902. The current exchange rate (S0) is 1.53 $/£. You also know that one year from now the exchange rate will be at 1.34 $/£. What is the effective yield of this security if your client holds the bond until maturity?

Reference no: EM133066258

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