Question
Assume the following information: 1-year interest rate on U.S. dollars = 11.7% 1-year interest rate on Singapore dollars = 9.4% Spot rate of Singapore dollar
Assume the following information: 1-year interest rate on U.S. dollars = 11.7% 1-year interest rate on Singapore dollars = 9.4% Spot rate of Singapore dollar = 0.41 USD/SGD 1-year forward premium on Singapore dollars = 3.95% Given this information, how much profit can be made with covered interest arbitrage, by borrowing 1 million USD?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
