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Carry Trade Problem: You have 1 0 0 0 0 0 Australian Dollars ( AUD ) , borrowed at 1 % annual interest. You find
Carry Trade Problem:
You have Australian Dollars AUD borrowed at annual interest. You find a municipal bond in Japan paying interest at maturity. You convert your AUD into Japanese Yep JPY at a rate of AUD When the bond matures in one year's time, you repatriate your money back into AUD at the rate of AUD. How much profit or loss have you made on this investment at maturity? indicate a loss with a negative number
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