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Discuss the various types of exchange rate systems and their impact on economies. b) Assume the following information Spot rate of = $1.60 180 day
Discuss the various types of exchange rate systems and their impact on economies. b) Assume the following information Spot rate of = $1.60 180 day forward rate of = 81.56 180 day UK interest rate = 4% 180 day US interest rate = 3% i) Based on the information above, explain whether covered interest arbitrage by US investors is feasible assuming that the investors use their own funds.
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