Question
ABC Corp.has $735,139 cash to invest in the foreign exchange market for a year.The following quotes were obtainedfrom the bank: Current spot ask rate of
ABC Corp.has $735,139 cash to invest in the foreign exchange market for a year.The following quotes were obtainedfrom the bank:
Current spot ask rate of the pound is $1.2241/ and the 360-day forward rate of the pound is $1.3488/.The 1-year period interest rate in the US is 2.37% and the 1-year period interest rate in the UK is 2.32%.
Is there an arbitrage opportunity?
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
9th Edition
0134519264, 9780134519265
