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Assume the following information: You have $1,000,000 to invest: Current spot rate of pound 90-day forward rate of pound $1.30 $1.28 3-month deposit rate
Assume the following information: You have $1,000,000 to invest: Current spot rate of pound 90-day forward rate of pound $1.30 $1.28 3-month deposit rate in United States 3-month deposit rate in Great Britain 12% p.a. 16% p.a. If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
