20 Covered interest arbitrage. The South African rand has a one-year forward premium of 2%. Oneyear interest

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20 Covered interest arbitrage. The South African rand has a one-year forward premium of 2%. Oneyear interest rates in France are 3 percentage points higher than in South Africa. Based on this information, is covered interest arbitrage possible for a French investor if interest rate parity holds?

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Exploring Economics

ISBN: 9780324395464

4th Edition

Authors: Robert L. Sexton

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