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Question 4 (3.33 points) Assume the following information: Current spot rate of New Zealand dollar Forecasted spot rate of New Zealand dollar 1 year from
Question 4 (3.33 points)
Assume the following information:
Current spot rate of New Zealand dollar
Forecasted spot rate of New Zealand dollar 1 year from now =
1-year forward rate of New Zealand dollar
Annual interest rate for New Zealand dollar deposit
Annual interest rate in the U.S.
$.64
$.59
$.62
9%
6%
Given the information in this question, the return from covered interest arbitrage by
U.S. investors with $500,000 to invest is. %.
about 6.00
about 5.59
about 7.33
about 8.14
about 9.00
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