Chapter One
The other option is to use each dollar to buy British pounds at the spot exchange rate of S dollars per pound, to obtain 1/S pounds with each dollar. Then the U.S. resident could use the 1/S pounds to buy a one-year British (U.K.) bond that pays the rate RUK. After a year, the person would have accumulated (1/S)(1 + RUK) pounds. ................
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