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Consider the information below: U.S. investors have $900,000 to invest: 1-year deposit rate offered on U.S. dollars 1-year deposit rate offered on euros 1-year forward
Consider the information below: U.S. investors have $900,000 to invest: 1-year deposit rate offered on U.S. dollars 1-year deposit rate offered on euros 1-year forward rate of euro Spot rate of euro 9.0% 11.0% $1.40 $.1.10 Given this information, if you conduct a covered interest arbitrage, how much dollars will you have in one year? $1,271,455 $1,538,460 None of the answers provided is correct. $963,000 $2,176,364
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