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Mr. Hans is a dealer for a bank in Frankfurt. He has $500,000 for a short-term money market investment and wonders if he should invest

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Mr. Hans is a dealer for a bank in Frankfurt. He has $500,000 for a short-term money market investment and wonders if he should invest in US dollars for 180 days or make an alternative arbitrage investment in GBP (Great British Pound). He faces the following rates. Spot exchange rate is $1.70/GBP, 180 days forward rate is $1.725/GBP, USD interest rate: 4.00% per annum, GBP interest rate is 2.00% per annum. Which based investment should Hans choose to invest and how much profit will he make? Select one: a.Pound based investment, 22,319 USD b.Pound based investment, 2,426 USD c. There is no CIA. It is IRP. d.Dollar based investment 22,319 USD Mr. Hans is a dealer for a bank in Frankfurt. He has $500,000 for a short-term money market investment and wonders if he should invest in US dollars for 180 days or make an alternative arbitrage investment in GBP (Great British Pound). He faces the following rates. Spot exchange rate is $1.70/GBP, 180 days forward rate is $1.725/GBP USD interest rate is 4.00% per annum, GBPinterest rate is 2.00% per annum. If Hans invests in Great British Pound how much pounds will he receive at the end of 180 days? Select one: a.858,500 b 297,058 c.300,000 d.867,000 Mr. Hans is a dealer for a bank in Frankfurt. He has $500,000 for a short-term money market investment and wonders if he should invest in US dollars for 180 days or make an alternative arbitrage investment in GBP (Great British Pound). He faces the following rates. Spot exchange rate is $1.70/GBP, 180 days forward rate is $1.725/GBP, USD interest rate: 4.00% per annum, GBP interest rate is 2.00% per annum. Which based investment should Hans choose to invest and how much profit will he make? Select one: a.Pound based investment, 22,319 USD b.Pound based investment, 2,426 USD c. There is no CIA. It is IRP. d.Dollar based investment 22,319 USD Mr. Hans is a dealer for a bank in Frankfurt. He has $500,000 for a short-term money market investment and wonders if he should invest in US dollars for 180 days or make an alternative arbitrage investment in GBP (Great British Pound). He faces the following rates. Spot exchange rate is $1.70/GBP, 180 days forward rate is $1.725/GBP USD interest rate is 4.00% per annum, GBPinterest rate is 2.00% per annum. If Hans invests in Great British Pound how much pounds will he receive at the end of 180 days? Select one: a.858,500 b 297,058 c.300,000 d.867,000

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