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Interest rate in US (Rh): 7% Interest rate in Canada (Rh) 5% Line of credit in US USD 10,000,000 Line of credit in Canada CAD
| Interest rate in US (Rh): | 7% |
| Interest rate in Canada (Rh) | 5% |
| Line of credit in US | USD 10,000,000 |
| Line of credit in Canada | CAD 12,500,000 |
| The spot rate for CAD (S0): | $0.80 |
| 1-year forward rate for CAD (FR): | $0.812 |
Based on your recommended investment strategy your covered interest arbitrage profit should be:
Answer:
CAD 52,340
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The Handbook Of News Analytics In Finance
Authors: Gautam Mitra, Leela Mitra
1st Edition
047066679X, 978-0470666791
