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You notice that the 9-month risk free interest rates in the UK is 4% per...

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Finance

You notice that the 9-month risk free interest rates in the UK is 4% per annum with continuous compounding and the US rate is 7% per annum, with continuous compounding. The spot price of the Pound Sterling is $0.2500. Assume the US is your home country.

Answer the following:

What is the no-arbitrage price of the 9-month futures contract?

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