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Consider the following: Risk-free rate in the United States Risk-free rate in Australia Spot exchange rate 0.04/year 0.03/year 1.67 A$/$ Assume the current market futures
Consider the following: Risk-free rate in the United States Risk-free rate in Australia Spot exchange rate 0.04/year 0.03/year 1.67 A$/$ Assume the current market futures price is 1.66 A$/$. You borrow 167,000 A$, convert the proceeds to U.S. dollars, and invest them in the U.S. at the risk-free rate. You simultaneously enter a contract to purchase 170,340 A$ at the current futures price (maturity of 1 year). What would be your profit (loss)
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