Hi Is there a mistake on the memo here or am i not reading the question correctly? in the question it seems like he Uk int rate is 1% and the US rate is 2%. But in the answer the multiply by the USA rate which they have as (1+ 1%/4)? I would expect it to be (1+2%/4) The fact that they quote the exchange rate as $ 0.625 is also confusing. Or is this convention to refer to the fact that 0.625 pound=$1 Thanks!
Good spot Yes indeed. The rates have been reversed in the solution for some reason. So you either need to reverse the question or reverse the rates in the solution - sorry!
