Suppose that the current spot exchange rate is euro 1.50 / GBP and the one-year forward exchange rate is euro 1.60 / GBP. The one-year interest rate is 5.4% in euros and 5.2% in pounds. You can borrow at most euros 1,000,000 or borrow the equivalent pound amount of GBP 666,667.
What is the expected forward rate according to the IRP?