CIMA Exam CIMAPRA19-F03-1 Topic 1 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 69
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.

A1.667

B1.668

Show Suggested Answer

Suggested Answer: A

by Deandrea at May 27, 2023, 04:45 PM

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