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Business, 25.04.2020 00:39 jlulu2738

Suppose the 1-year risk-free rate of return in the U. S. is 4%, and the 1-year risk-free rate of return in Britain is 7%. The current exchange rate is 1 pound = U. S. $1.65. A 1-year future exchange rate of for the pound would make a U. S. investor indifferent between investing in the U. S. security and investing in the British security.

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