Forward Exchange Rate Assignment
February 21st, 2020
finance Manager of an American Company has US Dollars 30 million that he can invest
for one year. He is considering the possibility of either investing in USA where a 1-year
investment yields an interest rate of 8%or in Britain where a 1-year investment produces an interest rate of 12%. The current exchange rate is 0.74/US$. Calculate the 1-year forward exchange rate that will make the financial manager indifferent between investing in USA or G.Britain. (5 marks) Get Finance homework help today