finance Manager of an American Company has US Dollars 30 million that he can invest
for one year. He is considering the possibility of either investing in USA where a 1-year
investment yields an interest rate of 8%or in Britain where a 1-year investment produces
an interest rate of 12%. The current exchange rate is 0.74/US$. Calculate the 1-year
forward exchange rate that will make the financial manager indifferent between investing
in USA or G.Britain. (5 marks

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