Question
Suppose that the current EUR/GBP rate is 0.6689 and the one-year forward exchange rate is 0.6730. The one-year interest rate is 1.5% in euros and
Suppose that the current EUR/GBP rate is 0.6689 and the one-year forward exchange rate is 0.6730. The one-year interest rate is 1.5% in euros and 2.1% in pounds. You can borrow at most 1,000,000 or the equivalent pound amount. Suppose you are a Euro-based investor. Determine the profit/loss (in EUR, no cents) if you borrow locally and invest in pounds
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Long Term Care Your Financial Planning Guide
Authors: Phyllis Shelton
1st Edition
978-0963351692
