Chapter Fifteen - University of Nevada, Reno

Pound rate = $729,411.77/625,000 = $1.1671/£. Thus, the pound should be selling at $1.1671/£ in order for the bank to earn 4 percent. c. Does your answer to part (b) imply that the dollar should appreciate or depreciate against the pound? The dollar should appreciate against the pound. It takes fewer dollars to buy one pound. ................
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