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CIMA Exam CIMAPRA19-F03-1 Topic 1 Question 69 Discussion
Actual exam question for
CIMA's
CIMAPRA19-F03-1 exam
Question #: 69
Topic #: 1
[All CIMAPRA19-F03-1 Questions]
Topic #: 1
D has US$10 million to invest over 12 months in either USS or GBP Its options are to invest in USS at the present USS interest rate of 10 18%. or to convert the USS to GBP at the spot rate GBP1 =US$1 61 and invest in GBP at an interest rate of 6.4%.
According to the interest rate parity theory, what will the one year forward rate be?
Give your answer to three decimal places.
Suggested Answer:
A
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