Question
2. (15) Here are some prices in the international money markets: Spot rate 704.40 Chilean peso per US$ 90-day forward rate 718.50 Chilean peso per
2. (15) Here are some prices in the international money markets:
Spot rate 704.40 Chilean peso per US$
90-day forward rate 718.50 Chilean peso per US$
Annual Chile interest rate 9.2%
Annual U.S. interest rate 4.6%
Given this information,
C) Calculate the 90-day forward rate that will eliminate the covered interest arbitrage opportunity. Show all your calculations.
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
4th Edition
0256147175, 978-0256147179
