Question
Spot rate of Ringgit = $.200 180-day forward rate of Ringgit = $.198 180-day Malaysia interest rate = 7% 180-day New Zealand interest rate =
Spot rate of Ringgit = $.200
180-day forward rate of Ringgit = $.198
180-day Malaysia interest rate = 7%
180-day New Zealand interest rate = 6%
The details are given as shown above. Determine if covered interest arbitrage would be worthwhile for Malaysian investors who have Ringgit to invest. By having RM 1,000,000 as the initial investment calculate and explain your answer.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
