The treasurer of a major U.S. firm has $30 million to invest for three months. The interest
Question:
The treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is .15 percent per month. The interest rate in Great Britain is .26 percent per month. The spot exchange rate is £.813, and the three-month forward rate is £.827. Ignoring transaction costs, in which country would the treasurer want to invest the company’s funds? Why?
Step by Step Answer:
The treasurer would want to invest the companys funds in Great Britain be...View the full answer
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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