Suppose there is an interest rate spread of 1 % between the United States and South Africa (S.A.). The yield on a one-year U.S. Treasury security is 5% (rd = 5%) while the yield on a comparable South African security is 6% (rF = 6%). You wish to invest $50,000. The indirect quote for the rand-dollar (R/$) spot exchange rate is 7 South African rands (R7) per dollar. Suppose you invest your funds in U.S. securities for 6 months. Calculate the future value of your investment. $51,250 $53,000 $51,500 $50,500 None of the above If, instead, you invested your funds in South African securities for 6 months, what is the future value of your investment? R 360,500 R 358,750 R 53,000 R 51,500 R 371,000 To cover your South African investment, you agree today to exchange the South African rand earnings in 6 months at the 6-month forward exchange rate of R7.125. How much will you receive in U.S. dollars in 6 months? $2,568,562.50 $51,500 $49,122.81 $50,596. None of the above What forward rate would cause you to be indifferent between investing your money in the U.S. bond and investing in South Africa? Note that at this forward rate, interest rate parity holds R 6.8019 7.0341 R 7.2390 None of the above