Question
For a Carry Trade, if yen LIBOR is 0.5% and USD LIOBR is 2.5%, what would you do to make the trade profitable? A. borrow
For a Carry Trade, if yen LIBOR is 0.5% and USD LIOBR is 2.5%, what would you do to make the trade profitable?
| A. | borrow dollars in U.S. markets then invest the borrowed dollars in Japanese markets and make a profit of 2% without currency impact. | |
| B. | borrow Japanese yens in Japan markets then invest the borrowed yens in U.S. markets and make a profit of 2% without currency impact. | |
| C. | borrow dollar in U.S. market then invest the borrowed dollars in Japan and make a profit of 2.5% without currency impact. | |
| D. | borrow Japanese yen in Japan markets then invest the borrowed yen in U.S. markets and make a profit of 2.5% without currency inpact. |
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown, Sanford J. Leeds
11th Edition
1305262999, 1305262997, 035726164X, 978-1305262997
