Question
Assume the following information: U.S. investors have $1,000,000 to invest: 1-year deposit rate offered on U.S. dollars = 12% 1-year deposit rate offered on Singapore
Assume the following information:
U.S. investors have $1,000,000 to invest:
1-year deposit rate offered on U.S. dollars | = | 12% |
1-year deposit rate offered on Singapore dollars | = | 10% |
1-year forward rate of Singapore dollars | = | $.412 |
Spot rate of Singapore dollar | = | $.400 |
Show detailed calculations of covered interest arbitrage and explain why your arbitrage is profitable.
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Finance For IT Decision Makers
Authors: Michael Blackstaff
3rd Edition
1780171226, 978-1780171227
