Taking 1 00000 yuan as an example, according to the interest rate parity condition, the theoretical three-month forward exchange rate is so,1GBP =1.6104/1.614 USD. Comparing the actual three-month forward exchange rate: 1 GBP = 1.6055/ 1.6085 USD, we can see that the three-month forward exchange rate is undervalued. Therefore, if an investor owns 6,543,800+pounds and invests in the new york market, the following swap transactions should be adopted to avoid foreign exchange risks: First, in the spot foreign exchange market, at the price of 654.38+ 0 pounds = 654.38+0.6025 dollars, he sells 6,543,800 pounds, which is converted into 654.38+ 060250 dollars. Secondly, in the forward foreign exchange market, at the price of 1 = 1.6085 USD, sell160250× (1+8 %× 3 ÷12) =1.