based on the information in question 1 for the beginning of the year use the interna 1555020

Based on the information in question 1 for the beginning of the year, use the international Fisher effect (IFE) theory to forecast the annual percentage change in the British pound’s value over the year.

question 1 As an employee of the foreign exchange department for a large company, you have

been given the following information:

 Beginning of Year

Spot rate of £ ¼ $1.

rate of Australian dollar (A$) ¼ $.70

 Cross exchange rate: £1 ¼ A$2.28

One-year forward rate of A$ ¼ $.71

One-year forward rate of £ ¼ $1.58004

 One-year U.S. interest rate ¼ 8.00%

 One-year British interest rate ¼ 9.09%

One-year Australian interest rate ¼ 7.00%

Determine whether triangular arbitrage is feasible and, if so, how it should be conducted to make a profit