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Question 2 0.4 pts Let's suppose you have $1 million to invest. You are considering to invest in UK first, then convert the British
Question 2 0.4 pts Let's suppose you have $1 million to invest. You are considering to invest in UK first, then convert the British Pound back to US$ in the future. You know following information: Annual Interest rate on investment in US: 3% Annual Interest rate on investment in UK: 2% Investment period: 1 year Current exchange rate: 1.65 $/BP Forward exchange rate which you can apply when converting BP to US$: 1.63 $/BP In this case, would you be able to make profit through the covered-interest arbitrage? No Yes
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