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Assume the following information: Current spot rate of Australian dollar Forecasted spot rate of Australian dollar 1 year from now 1-year forward rate of Australian
Assume the following information:
Current spot rate of Australian dollar Forecasted spot rate of Australian dollar 1 year from now 1-year forward rate of Australian dollar Annual interest rate for Australian dollar deposit Annual interest rate in the United States
= $.64
= $.59 = $.62 = 9% = 6%
Given the information in this question, what the return from covered interest arbitrage by U.S. investors with $500,000 to invest will be?.
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