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Assume the following information: Current spot rate of pound=$1.60 1-year forward rate of pound=$1.57 Forecasted spot rate of Singapore dollar 1 year from now =$1.65
Assume the following information:
- Current spot rate of pound=$1.60
- 1-year forward rate of pound=$1.57
- Forecasted spot rate of Singapore dollar 1 year from now =$1.65
- 1-year deposit rate in U.S.=2%
- 1-year deposit rate in U.K.=5%
Given the information in this question, the return from covered interest arbitrage by U.S. investors with $1,000,000 to invest is about:
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Financial Markets and Institutions
Authors: Jeff Madura
11th Edition
1133947875, 9781305143005, 1305143000, 978-1133947875
