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Assume the spot rate for the British pound currently is $1.5701/£. Also assume the one-year forward...

Assume the spot rate for the British pound currently is $1.5701/£. Also assume the one-year forward rate is $1.5574/£. A risk-free asset in the U.S. is currently earning 3.2 percent interest rate. If interest rate parity holds, what rate can you earn on a one-year risk-free British security?

A) 2.37 percent

B) 3.67 percent

C) 4.04 percent

D) 4.57 percent

E) 4.92 percent

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