Suppose the one-year interest rate on British pounds is 11 percent, the dollar interest rate is 6 percent, and the current $/d spot rate is $1.80. a. What do you expect the spot rate to be in one...

Suppose the one-year interest rate on British pounds is 11 percent, the dollar interest rate is 6 percent, and the current $/d spot rate is $1.80.

a. What do you expect the spot rate to be in one year?

b. Why can we not observe the expected future spot rate?