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question 7,8,9 are part of the same question so please answer them all. Use the following information for next 3 questions. Assume the following information:
question 7,8,9 are part of the same question so please answer them all.
Use the following information for next 3 questions. Assume the following information: Question 7 (3.57 points) Saved If U.S. investors use covered interest arbitrage for a 1 -year investment, what will be the amount of U.S. dollars that U.S. investors will have after one year? $1,068,907.56.$1,048,739.50.$1,051,166.68$1,031,333.33. Does the covered interest arbitrage work for U.S. investors? Yes, the covered interest arbitrage works for U.S. investors because the yield is higher than 6%. No, the covered interest arbitrage does not work for U.S. investors because the yield is lower than 6%. Yes, the covered interest arbitrage works for U.S. investors because the yield is higher than 4%. No, the covered interest arbitrage does not work for U.S. investors because the yield is lower than 4%. Question 9 (3.57 points) Does Interest Rate Parity hold under the current market condition? What is the 1 year forward rate of Cayman Islands dollars that makes covered interest arbitrage infeasible? (Rounded the answer to 4 decimal points.) Yes. $1.1900. No. $1.2231. No. $1.1774. It cannot be determined Step by Step Solution
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