Question
The spot exchange rate is $1.20 per . One year ahead forward rate is $1.25 per . If the interest rate in dollars is 4%
The spot exchange rate is $1.20 per . One year ahead forward rate is $1.25 per . If the interest rate in dollars is 4% and the interest rate in euros is 5%. If an investor borrows $100 and invests in a euro denominated bond while locking the one year conversion rate using a forward contract. What is her profit from this strategy?
| $5.38 | ||
| $5.43 | ||
| $5.48 | ||
| $5.59 |
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Passive Income The Passive Income Millionaire
Authors: Alexus Arellano
1st Edition
9814950882, 978-9814950886
