Question
A U.S. investor has $1,000 in her possession and considers investing in the U.S. security or in Frances security. The current spot exchange rate is
A U.S. investor has $1,000 in her possession and considers investing in the U.S. security or in Frances security. The current spot exchange rate is 0.8/$ and the 180-day forward exchange rate is 0.7874/$. The annualized risk-free rate is 7% in the U.S. and 5% in France.
If any arbitrage opportunity exists, what is the highest annualized percentage rate of return the investor would expect?
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Venture Capital Mindset Become The Candidate That Every Venture Capital Firm Would Like To Hire
Authors: Renata George
1st Edition
1720219370, 978-1720219378
