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Assume the following information Current spot rate of Australian dollar = $0.66 Forecasted spot rate of Australian dollar 1 year from now = $0.59 1-year
Assume the following information
| Current spot rate of Australian dollar | = | $0.66 |
| Forecasted spot rate of Australian dollar 1 year from now | = | $0.59 |
| 1-year forward rate of Australian dollar | = | $0.62 |
| Annual interest rate for Australian dollar deposit | = | 9% |
| Annual interest rate in the U.S. | = | 6% |
Given the information in this question, the return from covered interest arbitrage by U.S. investors with $530,000 to invest is about _______in decimal format.
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Finance At The Threshold
Authors: Christopher Houghton Budd
1st Edition
0566092115, 978-0566092114
