What must be one-year exchange rate

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1. If the interest rate in the United Kingdom is 10 percent, the interest rate in the United States is 11 percent, the spot exchange rate is $1.67/£1, and interest rate parity holds, what must be the one-year forward exchange rate? (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616))

2. Frank purchased his house 16 years ago by taking out a 25-year mortgage for $150,000. The mortgage has a fixed interest rate of 5 percent compounded monthly. If he wants to pay off his mortgage today, how much money does he need? He made his most recent mortgage payment earlier today.

Reference no: EM131974435

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