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Assume the following information: 1-year deposit rate offered on U.S. dollars = 2.5% 1-year deposit rate offered on Singapore dollars = 4.0% 1-year forward rate
Assume the following information:
1-year deposit rate offered on U.S. dollars = 2.5%
1-year deposit rate offered on Singapore dollars = 4.0%
1-year forward rate of Singapore dollars = $0.795
Spot rate of Singapore dollar = $0.80
Given this information, does covered interest arbitrage worthwhile for a US investor? Assume the investor invests $1,000,000
Please do not round during intermediate steps and round your final answer to four decimal places.
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