Question
The following exchange rates and interest rates are available: Spot rate: $1.5000 / British Pound Six month Forward: $1.5625 / British Pound Six month U.S.
The following exchange rates and interest rates are available: Spot rate: $1.5000 / British Pound Six month Forward: $1.5625 / British Pound Six month U.S. interest rate: 6.000% Six month U.K. interest rate: 5.000% You have $30,000 available. Can you make money by covered interest rate arbitrage transaction, and if so, how much?
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Case Studies In Finance
Authors: Robert F. Bruner
4th Edition
0072338628, 978-0072338621
