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Hi,
Would you mind helping me with this question?
The current spot rate of the US $ against the £ is $/£ 1.8420
Interest in the US is 5% per year. Interest in the UK is 4% per year.
what would you expect the three month forward rate to be?the answer is $/£ 1.8466 (I need to understand the calculation to get to this answer)
Thank you in advance,
SP
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