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Suppose that you are the treasurer of Tesla with an extra US$1,000,000 to invest for three months. You are considering the purchase of U.S. T-bills
Suppose that you are the treasurer of Tesla with an extra US$1,000,000 to invest for three months. You are considering the purchase of U.S. T-bills that yield 4.4% (annual rate). The spot exchange rate is $1.00 = OMR 0.3812, and the three-month forward rate is $1.00 = OMR 0.3843. What must the interest rate in Oman (on an investment of comparable risk) be before you are willing to consider investing there for three months?
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