1.The cost of one-year Australian dollar securities is 8 per cent, one-year Australian dollar loans yield 10...

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1.The cost of one-year Australian dollar securities is 8 per cent, one-year Australian dollar loans yield 10 per cent, and UK sterling loans yield 15 per cent. The dollar/pound spot exchange is $1.50/£1, and the one-year forward exchange rate is $1.48/£1. Are one-year Australian dollar loans more or less attractive than UK sterling loans?

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Financial Institutions Management A Risk Management

ISBN: 9781743073551

4th Edition

Authors: Helen Lange, Anthony Saunders, Marcia Millon Cornett

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