Question
An American purchases 1 million today and deposits the funds in a London bank for one year at an annual rate of 4%. She simultaneously
An American purchases 1 million today and deposits the funds in a London bank for one year at an annual rate of 4%. She simultaneously sells forward (1 year contract) 1.04 million. She earns more than she would have earned, if she had deposited her funds in a bank in the United States. She is:
Hedging.
Speculating.
Locking in an arbitrage profit.
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Personal Finance For Dummies
Authors: Eric Tyson
5th Edition
0470038322, 978-0470038321
