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What risk-free dollar- denominated return can be locked

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Reference no: EM132802482

Problem - If the current exchange rate is $1.95/f, the 1-year forward exchange rate is $2.15/f, and the interest rate on British government bills is 6% per year, what risk-free dollar- denominated return can be locked in by investing the British bills?

a. 14.6%

b. 15.5%

c. 16.9%

d. 17.8%

Reference no: EM132802482

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