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The interest rate on U.S. three-month Treasury bills dropped to very low levels at the end of 2008 and remained there for several years. The
The interest rate on U.S. three-month Treasury bills dropped to very low levels at the end of 2008 and remained there for several years. The table below contains data for four consecutive months from this period. The data are the three-month U.S. Treasury bill rate, RUS; the Korean 91-day Monetary Stabilization Bond interest rate, RSK; and the exchange rate of the U.S. dollar against the Korean won (won per dollar), EW/$. Date RUS RSK EW/$ Mar, 2010 0.15% 2.18% 1,131.3 Apr, 2010 0.16% 2.15% 1,108.4 May, 2010 0.16% 2.15% 1,202.5 Jun, 2010 0.12% 2.14% 1,222.2 Part 2 Imagine that you borrow $100 at the Treasury bill rate to invest in Korean stabilization bonds, thus doing a
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