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Assume the following information: U.S. investors have $1,375,000 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 $1,375,000 to invest | ||
| 1-year deposit rate offered on U.S. dollars | = | .12 |
| 1-year deposit rate offered on Singapore dollars | = | 0.105 |
| 1-year forward rate of Singapore dollars | = | $0.412 |
| Spot rate of Singapore dollar | = | $0.40 |
interest rate parity doesnt exist and covered interest arbitrage by U.S. investors results in a yield of _______ which is above what is possible domestically
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