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5. Assume the annual interest rate in Britain is 2.5% and 3.0% in the U.S. Also assume U$1.15/ . If a trader wishes to make
5. Assume the annual interest rate in Britain is 2.5% and 3.0% in the U.S. Also assume U$1.15/ . If a trader wishes to make money from carry trade, 1) from which country should the trader borrow? 2) If the trader borrows US115,000 or 100,000, what is the profit the trader can achieve? First write the equation and then compute. 5. Assume the annual interest rate in Britain is 2.5% and 3.0% in the U.S. Also assume U$1.15/ . If a trader wishes to make money from carry trade, 1) from which country should the trader borrow? 2) If the trader borrows US115,000 or 100,000, what is the profit the trader can achieve? First write the equation and then compute
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