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Assume the following information: Spot rate of Canadian dollar = $.80 90-day forward rate of Canadian dollar = $.79 90-day Canadian interest rate = 4%
- Assume the following information:
Spot rate of Canadian dollar = $.80
90-day forward rate of Canadian dollar = $.79
90-day Canadian interest rate = 4%
90-day US interest rate = 2.5%
- Explain the steps you would use in covered interest arbitrage with $1 million of your own money (no leverage used).
- What would be your profit?
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Fundamentals Of Financial Management
Authors: James C Van Horne
3rd Edition
0133393410, 978-0133393415
