If the 12-month interest rates for the United States and the United Kingdom are 6% and equal, and £1 = $2 in the spot market, then what do you expect the 12-month forward rate to be? (My answer was 2.06 so shouldn't the answer be C?)
A. 1.90
B. 2.00
C. 2.11
D. 2.10

Q&A Education