Question
Taking advantage of the carry trade Spot Rate=9.5% Forward Rate= 10 pesos/$ you have $1,000,000 One year government debt Mexico 7% USA 1% Can you
Taking advantage of the "carry trade" Spot Rate=9.5% Forward Rate= 10 pesos/$ you have $1,000,000 One year government debt Mexico 7% USA 1% Can you make money off this? What is the effects of the covered interest arbitrage? Calculation of % premium or discount.
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Global Finance And The Macroeconomy
Authors: A. Makin
1st Edition
0333736982, 978-0333736982
