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Problem 5 The current spot rate is EUR/GBP 1.1600 and the six-month forward rate is EUR/...

Problem 5 The current spot rate is EUR/GBP 1.1600 and the six-month forward rate is EUR/ GBP 1.16300. The six-month interest rate in the UK is 0.40% and the six-month interest rate in the Eurozone is 0.44%. What would the British interest rate have to be per annum so that there would be no arbitrage opportunity? (round up your answer to the 4th digit)

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UR l 1600. 凸 G mont aionoest oat hat should mevai ln iiek EUR. 16300- 1- 1600 1 . O04イ 1. 0044 CAY Λ interest Jat Per annum

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