(Solved): Currently, the spot exchange rate is $(1.29)/() and the three-month forward exchange rate is $(1.3 ...

Currently, the spot exchange rate is

and the three-month forward exchange rate is

. The three-month interest rate is

per annum in the U.S. and

per annum in the U.K. Assume that you can borrow as much as

or

. Is interest rate parity is currently holding, and which of the following is true, given the other variables? IRP does not hold - the forward rate is too high IRP does hold - the forward rate is too high IRP does hold - the forward rate is too low IRP does not hold - the forward rate is too low