Question
(10) Here are some prices in the international money markets: Spot rate 73.708 Indian Rupees per US dollar 180-day forward rate 76.200 Indian Rupees per
- (10) Here are some prices in the international money markets:
Spot rate 73.708 Indian Rupees per US dollar
180-day forward rate 76.200 Indian Rupees per US dollar
Annual India interest rate 8.5%, represents both borrowing and lending rate
Annual U.S. interest rate 4.60%, represents both borrowing and lending rate
Given above information, calculate the arbitrage profit assuming the US investor can borrow and invest $400,000 for the next 180 days. Show all your calculations.
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
978-1292200743
