Question
The following is market information: Current spot rate of pound = $1.47 90-day forward rate of pound = $1.49 3-month deposit rate in U.S. =
The following is market information:
| Current spot rate of pound | = | $1.47 |
| 90-day forward rate of pound | = | $1.49 |
| 3-month deposit rate in U.S. | = | 1.1% |
| 3-month deposit rate in Great Britain | = | 1.3% |
If you have $100,000 and use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?
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Personal Finance For Dummies
Authors: Eric Tyson
9th Edition
1119517893, 978-1119517894
