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Assume the following information: You have $900,000 to invest Current spot rate of Australian dollar (A$) is $0.62 180-day forward rate of the Australian dollar
Assume the following information:
You have $900,000 to invest
Current spot rate of Australian dollar (A$) is $0.62
180-day forward rate of the Australian dollar is $0.64
180-day interest rate in the U.S. is 3.5%
180-day interest rate in Australia is 3.0%
What is the return obtainable after 180 days from covered interest arbitrage?
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