Question
Clayton Moore is the manager of an international money market fund managed out of London. Unlike many money funds that guarantee their investors a near
"Clayton Moore is the manager of an international money market fund managed out of London. Unlike many money funds that guarantee their investors a near risk-free investment with variable interest earnings, Clayton Moore's fund is a very aggressive fund that searches out relatively high-interest earnings around the globe, but at some risk. The fund is pound-denominated. Clayton is currently evaluating a rather interesting opportunity in Malaysia. Since the Asian Crisis of 1997, the Malaysian government enforced a number of currency and capital restrictions to protect and preserve the value of the Malaysian ringgit. The ringgit was fixed to the U.S. dollar at RM3.80/$ for seven years. In 2005, the Malaysian government allowed the currency to float against several major currencies. The current spot rate today is RM 3.13482 divided by $. Local currency time deposits of 180-day maturities are earning 8.895% per annum. The London eurocurrency market for pounds is yielding 4.196% per annum on similar 180-day maturities. The current spot rate on the British pound is $ 1.5823 divided by pound, and the 180-day forward rate is $ 1.5563 divided by pound. The initial investment is pound1 comma 125 comma 000.00."
This is the problem I have a question about. The correct answer for investment proceeds from the initial investment is 1,194,693.44 but I am getting 1,195,179.55.
What am I doing wrong?
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