The one-year forward rate of the British pound is $1.3985, while the current spot rate is...

Question

Question

The one-year forward rate of the British pound is $1.3985, while the current spot rate is $1.2239. Based on the forward rate,

Answer 1

Answer #1

Forward Rate = $1.3985

Spot Rate = 1.2239

Expected % change = (1.3985-1.2239)/1.2239

= 0.142658

i.e. 0.1427

Answer 2

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