Clayton Moore's Money Fund.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 RM3.13488/$. Local currency time deposits of 180-day maturities are earning 8.899% 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 $1.5819/, and the 180-day forward rate is$1.5558/. The initial investment is 1,000,000.00.

The investment proceeds from the initial investment is ( ANS) nothing.( Round to two decimal places.)

The return on the 180-day investment is (ANS)%. (Round to three decimal places.)

If Clayton Moore invests in the Malaysian ringgit deposit, and accepts the uncovered risk associated with the RM/$ exchange rate (managed by the government), and sells the dollar proceeds forward, he should expect a return of

4.196

6.202

8.899

3.80

% on his 180-day pound investment. This is

better

worse

than the

4.196

6.202

3.80

8.899

% per annum he can earn in the euro-pound market. (Round the percentage to three decimal places and select from the drop-down menus.)