3. (2 points) Calculate the dollar rates of return on a deposit 10,000 pounds in a London bank in a year when the interest rate on pounds is 10 percent and the dollar/pound exchange rate moves from 1.50 dollars per pound to 1.38 dollars per pound. What is the interest rate a U.S. Bank needs to oer to attract capital ows from London?
3. (2 points) Calculate the dollar rates of return on a deposit 10,000 pounds in a London bank in a year when the interest rate on pounds is 10 percent and the dollar/pound exchange rate moves from 1.50 dollars per pound to 1.38 dollars per pound. What is the interest rate a U.S. Bank needs to oer to attract capital ows from London?
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