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Level II
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Derivatives
Derivatives
Hard
A US-based portfolio manager observes the following: USD/GBP spot rate = 1.2650, US 1-year rate = 5.00%, UK 1-year rate = 4.25%. The 1-year forward rate for USD/GBP based on covered interest rate parity is closest to:
A
1.2741
B
1.2560
C
1.2650
D
1.2555
Select an answer to continue
Tags
#currency-forward
#covered-interest-rate-parity
#fx-hedging
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