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Assume the following: you have $10,000 to invest; the current spot rate of British pounds is $1.800; the forward rate of the pound is $1.780;
Assume the following: you have $10,000 to invest; the current spot rate of British pounds is $1.800; the forward rate of the pound is $1.780; the annual interest rate in the US is 1%; the annual interest rate in the UK is 2%.
Where would you invest your $10,000 to maximize your yield with no foreign exchange risk and approximately how much more you make compare to the other option?
in the United States, $13 | ||
in the United Kingdom, 13 | ||
in the United States, $63 | ||
in the United Kingdom, 63 |
please give solutions
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