Question
2 . The following is market information: Current spot rate of pound = $1.45 90-day forward rate of pound = $1.46 3-month deposit rate in
2. The following is market information:
Current spot rate of pound
=
$1.45
90-day forward rate of pound
=
$1.46
3-month deposit rate in U.S.
=
1.1%
3-month deposit rate in Great Britain
=
1.4%
If you have $150,000 and use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
