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13-10-2022
Business

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Two countries, the United States and the United Kingdom, produce only one good, saying wheat. Suppose the price of wheat is $2 in the United States and is £1 in England.
b) Suppose the price of wheat over the next year is expected to rise to $3.50 in the United States and to £1.5 in the United Kingdom. What should the one-year $:£ forward rate be? (8marks)

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