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Johns can invest $4 million, or the foreign currency equivaim of the bank's short term funds in a coverd interest arbitrage with Canada. The the
Johns can invest $4 million, or the foreign currency equivaim of the bank's short term funds in a coverd interest arbitrage with Canada. The the following quotes are provided
s 1.278 CAD/USD
F(4 months) 1.2902 CAD/USD
USD 4-munth interest rate 2.9%
CAD 4-month interest rate 4.7%
Calculate the covered interest arbirage (CIA) profi/Loss (2nd alternative-1st alternative)?
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Public Finance
Authors: H L Bhatia
30th Edition
9390080258, 978-9390080250
